Earnings call: Anglo American outlines strategic priorities amid market shifts

Anglo American (JO:AGLJ) PLC (AAL.L) discussed its financial and operational performance during a recent earnings call, emphasizing a strategic focus on operational excellence and growth despite a decrease in EBITDA by $4.5 billion, primarily due to lower commodity prices. Chair Stuart Chambers and CEO Duncan Wanblad outlined the company's commitment to shareholder value, operational stability, and cost management. Notable was the company's strong position in copper, iron ore, and polyhalite resources, and its plans to streamline the portfolio and improve safety.

Key Takeaways

• Anglo American experienced a reduction in EBITDA, driven by lower prices for PGMs, diamonds, and steelmaking coal.
• The company plans to reduce costs by $1 billion and achieve $1.6 billion in capital savings.
• Operational excellence and organizational streamlining are key priorities, with a focus on positioning key assets in the bottom half of their cost curves.
• Anglo American is committed to maintaining a strong balance sheet and cash generation to support growth and shareholder returns.
• Production challenges have been noted at Quellaveco and Los Bronces, with efforts to optimize operations and reduce costs.

Company Outlook

• The company aims to deliver shareholder value through strategic priorities and differentiated capabilities.
• Focus will be on growth opportunities like the Woodsmith project and Serpentina deal, which are expected to drive value.
• The company is prioritizing safety and has made progress in their safety journey.

Bearish Highlights

• Unit costs have increased by 4%, with a focus on total cost management.
• The effective tax rate was 38.5%, with guidance for 2024 remaining between 40% and 42%.
• Special items outside of underlying earnings impacted financial performance, including the review of carrying values.

Bullish Highlights

• EBITDA contributions mainly came from copper and iron ore, with smaller contributions from De Beers and nickel.
• The company is focused on driving stronger financial outcomes and cash generation.
• Expansion plans are underway for copper growth projects at Collahuasi, Quellaveco, and Sakatti, with increased production expected in the early 2030s.

Misses

• Quellaveco's production was revised due to geotechnical issues, although an additional 25,000 tons of copper have been added to the revised mine plan.
• Los Bronces is facing challenges with hard ores and lower grades, leading to placing one processing plant on care and maintenance.

Q&A Highlights

• Wanblad discussed the allocation of capital for plant construction and optimizing ore bodies to offset the need for expensive equipment.
• The importance of community relationships in obtaining permits for projects like Quellaveco was emphasized, with potential delays due to government changes.
• Challenges with the Los Bronces-Andina synergy were acknowledged, with ongoing efforts to simplify operations and maximize value.
• The impact of lab-grown diamonds on carrying value and leveraging synergies with Codelco for Los Bronces were discussed.

Anglo American PLC has outlined a clear strategy for the future, focusing on cost management, operational stability, and strategic growth despite current market challenges. The company's leadership has highlighted the importance of maintaining a strong balance sheet and generating cash to support ongoing growth options and returns for shareholders. With a commitment to safety and operational excellence, Anglo American is working to position itself for long-term success in a fluctuating commodity market.

Full transcript - Anglo American (AALI) Q4 2023:

Stuart Chambers: Good morning, everyone. I'm Stuart Chambers, Chair of Anglo American. And it's my pleasure, as usual, to welcome you all, to our Results Presentation for 2023. Now, before handing over to Duncan and John, I'd just like to do two things I'd like to update you on last year's Board changes. And then also give you a very short board perspective on today and tomorrow. Firstly, on Board changes, delighted that Magali Anderson joined us in April last year, a Senior Industrialist in the world of cement, but actually much more importantly, for us, at any rate, a passionate expert in sustainability. And as you all know, sustainability is at the heart of all we do, and actually how we do it at Anglo American. And then in December, but it's very well known to you is Stephen Pearce stepped down and retired in December, as after seven years as our Finance Director, and we welcomed John Heasley, who we see here, who joined on the first of December, a little more than a couple of months ago, I must say, John, it feels like it's a lot longer than that. But I'm very pleased to say, at risk of embarrassing John that he's already made, and he's already having a big impact. So moving now to a brief perspective, on today, and on the future. And I'd like to start with a short few words on our long term future at Anglo American, we are in a very, very strong position indeed, we have extraordinary set of resources in copper, and high quality iron ore, and now in polyhalite. And collectively, these are all supported by three global mega-trends. We've got multiple decades of resource in all three of these. And in several cases, we actually have endowments potentially exceeding a century of mine life. So great potential for organic, long term sustainable growth. However, to exploit these assets, and to invest in them, we need the right balance sheet. And we need sustainable financial performance. So what do we mean by that? Well, last year's financial performance was poor. Now, sure, we have some very serious headwinds very seriously in PGM prices, but also in Diamond both prices and volumes. But Duncan and his team, of course, have not been and are not sitting around, waiting around and hoping for those cycles to bounce back. We have to instead be pulling every lever available to significantly improve our cash conversion, which, as you'll have seen last year, was at an unsustainable level. So what are those levers? Well, I'll mention a few reestablishing operational excellence as a way of life for us, continuing the significant cost reduction started last year and continuing through into operations this year. And you'll have seen, I'm sure, the announcements from South Africa, for example, in PGMs and in iron ore, they're examples of important cost reductions. And I'm sure you will appreciate that those announcements follow a significant amount, a number of months of both planning and engagement, these are not knee jerk reactions to a second half set of results. So Duncan is also very clear about the need to simplify our portfolio. In order to be able to allocate any extra cash we have to the most deserving long term growth prospects that we have. And of course, finally, he has already communicated that we will pursue the syndication of Woodsmith, in order for that to be a more manageable and major life project, just as we did with Quellaveco. So Duncan, and John will now talk about this, and war as well as presenting the numbers. But the reason I was keen to make this short introduction was to leave you in no doubt about the fact that the Board is fully behind all these short and medium term imperatives, which are required. So that will, we will be able to secure a strong long term future, which we all know is achievable at Anglo American. So thank you very much. I will now hand over Duncan, over to you.

Duncan Wanblad: Thank you, Stuart. And good morning to you all. Welcome, as always, and thanks a lot for joining us today. There's quite a lot that we'd like to cover this morning. And I'd like to also highlight that there's a more extensive amount of detail in the appendix this time around and obviously encourage you to work through that as well in your own time. So I'm going to unpack our 2023 results. But before I do that, any detail, I'd like to set the scene in terms of where we stand today. And our strategic priorities moving forward. In short, 2023 was not the performance that I wanted. Much of that downturn was indeed driven by factors beyond our control. But that we can substantially step up our performance without relying on price recovery is an imperative. And we are now well progressed in that action to achieve that plan. The fundamental driver of performance is the mine planning process for us right, without a mine plan that works is very difficult to get the economic performance out of a business. And we have now set or reset the vast majority of those mine plans across the businesses to position them for pricing, operating and geotechnical realities that we face. This is an ongoing and a dynamic process. And there is often a settling in period of around 12 to 18 months when you transition from one plan to another. But I am confident that we now have that operating base in which we will be much more fit for the circumstances that are likely to face the business in the near term. We've also made some material changes to the organization with a very much bottom up focus to refresh that cut in the costs of our senior roles by 25%. But more importantly, set up a more effective governance program with less duplication, and more focused accountability across the whole of the business. Now, this process has already involved some really tough decisions, such as those that were announced earlier this week in South Africa to reset both Kumba and Anglo American platinum. I am very mindful that these impacts or the impacts of these decisions come across as very difficult for our teams. But they are absolutely essential for us to create a business that is more competitive, and can thrive over time to support all of our stakeholders. There's no point in a business that can only perform at the top of a cycle, but always struggles at the bottom of the cycle. So underlying these changes is a portfolio I think with some world class assets, and leading market positions. And that is all very, very well aligned with those three megatrends that you've heard me speak about so often, or the issues associated with the energy transition, the improving living standards of a growing population, and food security for a growing global population. Now, although the near term environment I think will remain relatively challenging for us in pots, the long term demand is really very bright. As far as I can see, based on those three trends. Therefore, I do remain very excited about the future of this industry, and particularly about the future of this company. And I am confident that we have the strategy and the capabilities to make that happen. Now, in terms of our strategy, we have three very, very clear priorities. Firstly, and most importantly, is operational excellence, as you heard Stuart speaking about. So irrespective of what assets you have in the portfolio, what business you have in the portfolio at any one time while it is in the portfolio, the obligation of it is to in the first instance, play its role in the portfolio and be operated in a way that it is deemed to be inside out and outside in operationally excellent. I have already said that the mine plans, which are at the very core of these businesses, is what we need to deliver on and improve the competitiveness of our assets, through the efficiency of the management of those assets, as well as the cost management within those assets. This is the foundation of absolutely everything else. And if we don't get that right, it's very difficult to get on to priority two and priority three within the strategy. So, secondly, we will work to improve our portfolio. Practically speaking, we will work towards having a simpler or a less complex portfolio where every asset has a role to play. And that asset needs to be in the portfolio on its merit. Thirdly, and it is third in this context. Over the longer term, we are focused on delivering the attractive and highly value accretive growth options that exists and are embedded already within the portfolio. We do have a clear pathway with well sequence plans from a capital allocation perspective, to be able to do that. But I do want to assure you that we will not compromise our balance sheet, nor our shareholder returns for growth investment. The execution of our strategy is underpinned by the application of our differential capabilities built over many, many, many decades of establishing operating businesses in both developing and developed markets. I'm going to go into each of these three key strategic priorities in the next few slides. And then later, I'll come back and give a little bit more detail on operational matters and growth. Now, by far in a way, our biggest focus is on our operations. Operational stability, and effective cost management do represent our biggest margin levers. And this is supported by sustainable production plans that prioritize value and thereby enhance margins and returns. We are intensely focused on the operating model to achieve a safer, repeatable and more consistent outcomes. The operating model itself absolutely leans into a competent mining plan. And that's very important. We're also starting to see the benefits come through from the work that we have done during 2023 to reset our organizational design. So in removing the duplication, it has moved much of the decision making closer to the operations, and not only now is a better accountability, but it is also easier to make the right decisions more quickly throughout the business. We expect that these actions are going to come together and deliver a $1 billion saving in annual OpEx through the business. And they are now well progressed. So much of that is already in track. Some of it has already been delivered, but we expect to hit that full $1 billion OpEx saving at a run rate of a $1 billion by the end of 2024. We are also taking $1.6 billion of capital out of the business over the next three years. And that capital removal is a function of an efficiency in terms of the way that we look at capital. So no change in scope, but better and effective -- better effective deployment of that capital. But more importantly, with a clear focus on every asset has a role to play in the portfolio at the right time in the cycle. And therefore we choose to allocate our growth capital to those elements, though, to those elements of the portfolio that deserve to be growing at this particular point in time. I believe that we have therefore already made some very significant progress. But we are far, far from done here. And we still have and we still are in the process of systematically reviewing all of our assets in conjunction with the detailed mining plan work that I mentioned earlier. We will then take the further actions that are absolutely going to be needed to ensure that every asset is competitive. And we're working towards positioning most of our key assets solidly in the bottom half of their respective cost curves. Now portfolio improvement, which is our second strategic priority, after operational excellence, and as we continue to go through these assets systematically, we also have to assess the role of every asset in the portfolio. As we go through that process, I want to assure you that nothing is off the table. But there has to be a very clear value rational for it to be in the portfolio or not in the portfolio. There are a number of important components to value. So when we look at this through the asset review, we have to look at the actual plan for that asset, we have to look at the markets in which that asset operates. We have to look at the time in the cycle that we be looking to make any of these decisions, we have to look at the role in the portfolio for this particular asset, over what period of time. And we certainly have to be cognizant of any of the frictional costs of change to either adding or removing assets to the whole of the portfolio. And as everybody knows, share prices and commodity prices can bounce around quite materially every single day. But when you're dealing with a capital cycle that extends over many years as we do in mining, with a very limited number of Tier 1 assets, then these decisions have to be very thoughtful and based in deep seated logical value. And that here's how we're thinking about it. I can definitely see portfolio improvement as a value lever. And I am working to remove the complexity from this business. But any changes that we make must be done with shareholder value in mind first. Finally, growth. At this time, this is the third on the list of priorities. And I mean in that order, but it doesn't mean that the growth potential in our portfolio is not genuinely exciting. We do have some very, very highly attractive project options that we already own and that do offer considerable growth potential in value. We are progressing a well sequence pipeline of copper projects with Woodsmith at the moment, and we have now created really valuable longer traded optionality in high quality iron ore with a Serpentina deal, that we announced this morning, which we will able be able to develop when the time is right. We have more of these adjacencies in the portfolio, we really like adjacencies, there are very few places in the world you can go in mining, where you can extract actual industrial synergies from all bodies or infrastructure. And there are a few more of these in the portfolio. So like Serpentina was an adjacency, I'm very keen to see if we can unlock others, such as Los Bronces, and Quellaveco, as we continue to progress discussions there with our partners. We will look to syndicate the risk, as Stuart said, and the capital on large green fields projects for value, and that includes Woodsmith, just as we did at Quellaveco, at the right time, and with the right partner. At differentiated capabilities spanning sustainability and social impact, technology and the belief in the importance of customer centric marketing are absolutely critical enablers for all three of our strategic priorities, as they position us as the partner of choice. These capabilities are critical to our day in and day out operations, as well as our ability to achieve our portfolio improvement and our growth ambitions. We have a compelling competitive advantage in how we bring these development projects to book. Quellaveco is a blueprint for the success in partnering for long term mutual benefit. And there is a deep expertise that runs through the organization to be enable to do these sorts of things. And we are applying these capabilities and taking them further at Woodsmith here in the UK, and also at Zuccotti in Finland. These will be mines of the future in terms of their minimal footprint, and the sustainable impact that they have on society and on the environment and reinforce our credentials as a credible partner of choice. We have a more focused and a prioritized approach to technology now. Meaning that we can better realize the benefits from our investment in future smart mining of recent years. We have learned a lot with some wins such as cost particle recovery, and dry stack solutions amongst others. And we've learned that at this stage, we have to focus on the technologies that we believe can bring about the greatest change to our own assets in our own portfolio first. Our Southern Africa, renewable strategy through in Envusa, I think is a great example of developing big picture solutions to very difficult problems and solutions that in themselves are NPV positive. And we do continue to make great progress there, with the financial flows expected imminently on three of our projects, which will firm bring about 520 megawatts of energy in our drive for three to five gigawatts over time. So moving on, then, just two quick summary of the ‘23 operating performance. And as always, safety is first. We do continue to make some very, very solid progress in our safety journey. And on our journey towards zero harm. We achieved our lowest ever injury frequency rate in 2023. And on top of that, we ended the year with the lowest frequency rate ever. That was 0.91. So we beat our own target quite significantly in terms of this. So on behalf of the whole organization, though, despite that progress, I do want to offer our deepest condolences to the family members, the friends and the colleagues of those who did lose their lives, during the course of the years we had three fatalities during the course of 2023. With those fatalities and the other accidents that we've had during the year, we know that we have more work to do. I'm very enthusiastically positive about the journey and the progress that we are making. But it is never going to be enough. And it's never going to be okay, until there are zero injuries, and certainly zero fatalities. This improvement in safety, though, I think is an important indicator for us. It really does give me much deeper confidence in how we are improving our underlying operational capabilities. I have said to you before, if you've got safe, stable production, if the production is stable, the safety is likely to be likely to be improved. And I think the indicators in terms of our safety performance are now starting to give us a clue that production is starting to become a little bit more stable. So these are good foundations, but more work to do to improve it there. In December, I spoke at some length, about the operational performance of this business through 2023. And you had the production update numbers just a couple of weeks ago. So I'm just going to keep this section quite brief. Before I hand over to John, production was up 2% that reflects really the ramp up of Quellaveco, which produced 319,000 tonnes in the year. And all of that at a very, very competitive unit cost of 111 cents a pound. Minas-Rio itself great performer during the year, set a number of performance records, while combat at the same time performed extremely well, but as we know, was materially hampered in terms of its ultimate performance by some of the Transnet constraints that we saw in South Africa. At Los Bronces, we are in a temporary phase now of lower grades and harder ores and the mine development has to catch up with the productive capacity in the whole of the operation. And on that basis, we have taken the decision to temporarily shutter one of the plants there for the next few years to allow that to catch up and allow us to get into the softer, higher grade ores from the next phase of the mine. At steelmaking coal, we do continue to focus here on safety. These protocols are absolutely extremely important given the ground that we working in. And given the interface of that ground to gas. And we are making good progress there. Just not as good as we would have liked to have made, but absolutely progress indeed. The PGM and De Beers businesses both performed well operationally. But as we have been speaking about for quite some time now, were really hampered by market lows, which we believe to be cyclical lows, generally. These numbers could have and should have been a little bit better. And that is where our focus is now on operational excellence, it is absolutely paramount to restoring the positive momentum within each and every asset in the business, the opportunities there remain significant. So with that, I'm going to hand over to John now who can take us through the numbers, and then I'll come back and talk to you about our thoughts and tensions and plans going forward, John?

John Heasley: Thank you, Duncan. And good morning, everyone. It's great to be here at my first Anglo American results presentation. As you know, it's been just over two months since I joined. And as well as getting to know the team here in London, I've had the opportunity to visit a number of our operations across South Africa, Peru and Brazil. And that's enabled me to reaffirm my view that Anglo American has great people and great assets. But it is clear that we have some opportunity to do some things differently, to drive stronger and more consistent financial outcomes, especially with regards to cash generation. Well, that will take some time. It has my full attention. And of course that I've my executive colleagues. Turning now to the results for 2023. Those results were dominated by the impact of lower commodity prices, especially in PGMs diamonds and steelmaking coal. Overall, our basket price was down 13%. PGMs and diamonds alone resulted in a $5.5 billion reduction in revenues. With the operating leverage impact of that being significant. With the group's EBITDA reducing by $4.5 billion. Of course action was taken to manage costs with unit costs up only 4% against the backdrop of double digit mining inflation. There is however more to do on both unit cost and total costs, which I'll come back to later. With EPS at $2.42, we've proposed a final dividend of $0.41 in line with our 40% payout ratio, taking the full year payout to $0.96. Cash generation was impacted by profit flow through and a working capital build, mainly in diamonds and PGMs. This resulted in an increase in net debt of $3.7 billion after funding growth, CapEx and dividends. Leverage remains within our target range at 1.1 times. Well, such years are to be expected in a cyclical business. And we run our balance sheet to absorb these periods, we are taking appropriate action to ensure robust ongoing cash generation and balance sheet strength. Looking now at the year-on-year $4.5 billion reduction in EBITDA, you can see that this was mainly driven by price with a $4.8 billion impact, while volume and cost impacts were a net $0.1 billion. Looking firstly, at the price impact, you can see this was driven by PGMs, steelmaking coal and diamonds PGMs basket price was down 35%. Steelmaking coal down 14%, while realized prices on diamonds were down 25%, mostly due to mix rather than the index price. Looking then at cost and volume, we were delighted with the successful ramp up of care vehicle, which contributed an incremental $1.5 billion of EBITDA in the period. Together with the record performance of Minas-Rio, which contributed another $0.3 billion year-on-year. These gains were largely offset by three factors. Firstly, a $0.7 billion impact at De Beers reflecting the margin impact of lower sales volumes in light of weak market demand. Secondly, as the $2.7 billion reduction at Copper Chile, driven by the operational fees at Los Bronces and associated lower grades and therefore higher costs. Thirdly, a $0.5 billion impact to PGMs, reflecting cost inflation and lower volumes with production down 5%. So in summary, overall EBITDA was down $4.5 billion, with a $4.6 billion impact from PGMs and De Beers, while Copper overall was up $0.8 billion. Turning now to costs which are going to be a big focus of mine. Unit costs across the group are up 4% in the year. With weaker producer currencies benefiting PGMs and iron ore. While copper Chile suffered in part from the impact of the low grade fees at Los Bronces. SMC was impacted by higher costs of production in challenging conditions as well as inflation. The overall position obviously benefited from the 18% reduction in Quellaveco unit costs as volumes ramped up. While unit costs are clearly an important measure for the industry, and for us total around $10 billion to truly tackle costs and cash generation, I will be very much focused on total costs. Which as you can see on this slide are closer to $22.5 billion and include certain overheads third-party commodity purchases, royalties, logistics and exploration. As we announced in December, and as you seen with a recently announced restructuring in South Africa, we're well advanced with plans to continue to drive a cost culture through the operating businesses. And we'll see a little bit more about that shortly. Just wrapping up, EBITDA it was standing back on her businesses have contributed to the total in the year. We saw a smaller contribution from De Beers which was last making in the second half of the year as pricing took a further step down, while nickel remained a marginal contributor. Copper and iron ore together contribute $7.2 billion or 72% of EBITDA with steelmaking coal and PGMs broadly making up the balance and $2.5 billion or 25%. Now moving on to other earnings matters below EBITDA. Firstly, the underlying effective tax rate was 38.5%. That is higher than last year reflecting profit and associated country tax rate mix with higher profit contributions from Peru and lower contributions from South Africa. Also, the overall lower profit at the group level meant there was a proportionately higher impact of those countries, which are loss making from a tax perspective including the UK. In addition, there was a 1.2 percentage point increase from the deferred tax impact of the new Chile Royalty regime as deferred tax balances were revalued. Guidance for 2024 remains, as I said in December at between 40% and 42%. Moving on to special items outside of underlying earnings, and as mentioned in a production report, we've been reviewing the carrying value of our assets as part of our year end audit process. That work has now concluded with non-cash impairments being recognized at both De Beers and nickel. At De Beers, we've taken at $1.6 billion impairment to take the carrying value to $7.6 billion. And this is largely driven by macroeconomic sentiment impacting our view on the near term consumer demand for luxury goods, particularly in the U.S. While China demand has also been slow to recover post COVID. There is no material impact on the value from the revised Botswana agreements. Moving on to nickel, you will recall we booked an impairment of $0.4 billion at the half year and have no books and additional $0.4 billion reflecting the sharply lower short to medium term price outlook that emerged through the second half of the year. This takes the carrying value of assets excluding inventory to zero, and we're in the process of assessing the appropriate operating strategy for the near term. Looking now to capital expenditure and cash. CapEx was broadly in line with last year at $5.7 billion, with higher sustaining spend being offset by lower growth, with care vehicle having ramped up in the year. Our sustaining spend in the short term is slightly higher than I would expect on an ongoing basis as we work through a number of investments and plant and tilling solutions, including our filtration plant at Minas-Rio, tailing solutions at Los Bronces, and the desalination plants at Quellaveco. Growth CapEx continues to be focused on Woodsmith and copper, including both Collahuasi and Quellaveco. More broadly, the industry is facing significant pressure from rising capital and operating costs, which in time will undoubtedly read through into prices as cost curves structurally shift. In the meantime, we have to absolute focus on cash generation, as I will address on the following two slides. You can see here that our sustaining attributable free cash flow that is cash flow before growth CapEx and dividends was $0.1 billion. Starting with EBITDA of $10 billion we saw $1.2 billion outflow from working capital driven by three main factors. Firstly, $0.5 billion of inventory build at De Beers and sales dropped off sharply in the second half of the year. We took significant action to limit the purchase of diamonds from Debswana and the back end of the year to minimize the increase and we'll continue to focus on managing the inventory balance, which now stands at more than $2 billion. Secondly, Kumba saw a $0.4 billion increase largely due to higher inventory as Transnet real challenges continued. And thirdly, we saw PGMs working capital increase as lower prices resulted in a reduction in the customer prepayment and port creditors partly offset by the lower inventory valuations. Less left cash flow from operations of $8.1 billion, just sufficient to fund tax interest distributions to non-controlling interest and sustaining CapEx. I will be looking at opportunities within all of these cash items to ensure we have a more sustainable cash generation profile going forward, even price recovery in diamonds and PGMs. In the short term, this will include laser focus on working capital, optimizing cash tax and strict control of sustaining CapEx, without of course compromising the safe operation of our assets. This will be with the ultimate objective of increasing the rate at which earnings convert to cash, allowing us to sustain their investment and our attractive growth options. With only marginal sustaining attributable free cash flow net debt increased in the year by $3.7 billion, mainly as a result of $1.6 billion of dividends paid and our continued growth CapEx. Our balance sheet is designed to be able to ride through such challenging years, as shown by our net debt to EBITDA being 1.1 times well within our bottom of the cycle target of 1.5. That said, I am clear that this level of cash generation is not sustainable over the long term. And that is why operational focus, cost and CapEx management and cash conversion have all of the executives absolute focus. Some examples of initial areas of focus are detailed here. Our $1 billion operating cost savings are progressing well. The $0.5 billion from corporate streamlining is largely completed with our own 25% cost reduction from the consolidation of senior head office roles and a more streamlined approach to governance and decision making. These savings will come through in the cost outside of unit costs and will be realized and fill this year. The business focused $0.5 billion reflects the value over volume strategy at Los Bronces and in PGMs. As well as reflecting the significant cost out programs announced this week in South Africa. Similar programs are ongoing in Chile, Australia and De Beers. These savings compared to 2023 will be achieved in a run rate basis by the end of this year, and then realized in full in 2025. We've also identified and committed to $1.6 billion of capital savings between 2024 and 2026. And as part of the corporate streamlining, we now have a single group wide project organization led by Ally Atkinson, who is transforming the way we look at our capital projects, while ensuring safety standards, asset integrity and reliability are maintained. This is focused on what we spend and how we most effectively execute that spend. Working together with my team. This ensures that we focus our capital in line with our strategic priorities, namely, and to copper, crop nutrients and high quality iron ore. Projects such as the third concentrator at Mogalakwena have been deferred. It's also resulting in a much more appropriately focused technology program with our experience over the last few years allowing us to target those investments with the greatest opportunity for our assets in terms of production, and water and energy efficiency. This means areas like course particle recovery, and our renewable energy projects in South Africa. On top of these measures, and as I said before, we also have great focus on ensuring that our working capital is managed efficiently, especially in the case of inventory. To recap, 2023 was a challenging year, with market conditions significantly impacting profitability and cash generation. Our balance sheet strength has absorbed that but we are clear that we will not rely on a recovery in PGM or diamond markets to improve our financial performance. We're taking clear and decisive action, as noted here, to reduce cost and capital spend to ensure that our cash generation is sufficient to maintain our strong balance sheet while funding our exciting growth options and returns to shareholders. Thank you, and then I'll hand back to Duncan.

Duncan Wanblad: Thanks, John. All right. So now to give a little bit more detail on the first of those strategic priorities, which was operational excellence and the levers that were pulling, as John just described. Now as we look forward, we have taken some decisive actions already to improve cost performance and cash generation by reconfiguring our production plans to ensure that they are in the first instance at least realistic. By recognizing a number of current operational constraints and align more closely with the near term demand without compromising in any way the long term viability or optionality embedded in any of these resources. Our organizational streamlining assigns very clear accountabilities for delivery, coupled with a relentless focus on our operating model to drive safe and stable production. We are strengthening our business to deliver consistent repeatable performance with -- that allows us to confidently execute on our operating plans. I want to just cover a few of the assets in a little bit more detail following the discussions we had with you in December. Quellaveco first, Quellaveco for us absolutely remains a 330,000 ton per annum operation, on average over the first five years of its life, and a 300,000 ton per annum operation, on average over the first 10 years of its life. That was the plan that approval. And that remains the plan for that business to this day. There will be inevitably, some in year variability depending on where we are at in the pit at any one particular point in time. But we are very confident in the medium term. And we see extraordinary further upside potential in that resource in the longer run. Last year, we had to revise the mine plan in response to geotechnical fault in one of the phases previously scheduled for mining this year in 2024. Now, putting safety first as you would expect us to do, we did take the decision to shell out the entire ramp angle of that phase. And while that stripping processes or progresses, other lower grade phases of that ore body are going to be mined before we come back to these higher grade phases, early in 2027. As a result of our guidance in December, we did lower the production from this mine by 65,000 tonnes in 2024. But that copper is still there, and we are going to get it. In fact, the revised mine plan for this resource has an additional 25,000 tons of copper in it, in total over the next few years compared to the previous plan. So given the current copper market, if you were looking at this with a little bit of a tongue in cheek, you'd say higher real term price for these volumes are probably going to be achieved by the fact that they've been delayed by a year or two. So staying with -- that wasn't the reason we did it, of course. So staying with copper. And talking a little bit about Los Bronces, Los Bronces is currently mining that single phase, as we've discussed before, which is now really impacted by some very, very hard ores, and some relatively lower grades. Additionally, mining phases and intermediate stockpiles that would typically provide operational flexibility for a mine like this have not been developed for a number of reasons, including permitting delays that we saw at the beginning of last year and the year before. Now while the operation works through these low grade phases, the low grade phase currently I'm referring to is called Infineon5 [ph]. And until the economics improve, the older and the slightly more costly Los Bronces processing plant. And that's a plant that handles around about 40% of the volumes is going to be placed on care and maintenance from the middle of this year. And Confluencia, which is our newer bigger plant, it's larger, it's less expensive to operate is going to continue to operate until such time as we've got the production phases to catch up with a productive capacity of both of the plants. Now this is a value based decision, it will enable this business to significantly reduce its operating costs and improve its competitive position at both the mine and at the plants, it will reduce its overheads, it will reduce its capital spend, as well as reducing reliance on external water sources. The average expected annualized cost saving from this action is somewhere between 30 and 40 cents a pound over the next five years. The next phase of this mine, so this is the Donoso 2 which will come in and overlap with Infineon5 at some particular point but then become the primary source of production for Los Bronces, is characterized by higher grades as well as soft ore, and is expected to benefit both production and unit costs from early 2027. So placing that plants on care and maintenance has given us the opportunity and the option to restart it in the future or for much stronger and a sustainable base. So at our PGM business and at Kumba. We have this week, as I mentioned earlier, set out the very difficult, but very necessary reconfiguration of both of those operations to set them up to be on a much more sustainable footing going forwards. Now that builds on around a 25% cost reduction from our consolidation of senior corporate office roles in both London and South Africa. And that PGMs. There is a very intentional strategy here at the concentrators to produce higher grade concentrate. And that's going to result with the same amount of PGMs as the outturn, but from lower concentrate volumes. That therefore enables us to provide some optionality in terms of reducing our overall furnace capacity, and therefore placing more timber smelter on care and maintenance. That reduces then both our operating and our capital cost footprint. That builds more on the extensive measures that the team have already developed to improve the positioning of these assets for the long term. And as we outlined in December, we -- as we focus on enhancing these returns through lower CapEx and asset optimization work, we will not be progressing work on the option for the third concentrator at Mogalakwena at this time, nor the expansion opportunities that we still have at Amandelbult and Mototolo. We are committed to delivering an all in sustaining cost of around $1050 per ounce in 2024. Now, as I think we do remain optimistic certainly about the quality of our assets with significant long term potential. But we must take, we just have to take the necessary steps to ensure that the longer term viability of those businesses is put in place today. Similarly, at Kumba, a well-trodden story now, the prolonged underperformance of Transnet has constrained that business quite significantly. And when we cannot rent another field, football field, have felt a piece of felt anywhere to put down the stock that she's really producing at the moment. And so we've had to take actions to right size the mining footprint, and then to match the prevailing logistics capacity that we see is going to be there in the shape and form for the next several years. That does not mean that we don't believe that we will come out of this, there are absolutely commercial and technical solutions that will see this happen. But we need to make sure that the business is able to perform well, while it is constrained. And that's what's happening, we will easily be able to start back Kolomela up again when the time is right. So it is therefore with a really, really heavy heart that we take these decisions to reduce the size of our workforce in both of these businesses. They big deal decisions, and they take a lot of time to get right. We recognize the widespread effects that this is going to have on our people, on their families and our communities. And we are putting play things in place and in terms of a number of appropriate plans and programs to help ease some of this pain. Now, moving to steelmaking coal, the gas, depth and the strata issues that prevail at Moranbah and Grosvenor underground long wars represent for us a really complex set of geotechnical challenges. Ground conditions that Moranbah are particularly difficult at the moment. So we're not out of the woods there just yet. It is difficult for that team to predict exactly how the strata is going to behave in the coming days and the coming weeks, this improvement journey is going to take some time. But getting it right is just a non-negotiable first. And if you've ever seen a commitment to putting safety over production, this would be it. At this point, the team is focused really on making sure that they can produce sustainably as possible and therefore ensure the safety of the personnel that are operating down there. And at the same time, we believe that we have made significant progress now already in reducing our methane venting, which along with an increased capacity to transfer methane to third parties has now already reduced our emissions in that business by 15%. We're also undertaking a fundamental optimization of the cost base to right size that footprint for what we see as lower nearer and medium term expected capacity from that business with a target of $100 a tonne by 2026. Turning now to De Beers. Operationally very, very strong, no doubt about it. But the current market weakness has resulted in sharply lower revenues. There are some green shoots as I will tell us of recovery in the first sight that we saw earlier this year. But we think it's going to take a little bit more time to return to the demand levels that were previously forecasted, given the macro headwinds in some of our key markets. The team have refreshed their strategy now to drive a much more streamlined, cost effective and simpler business. That mirrors a little bit the redesign that we have done in other parts of the company. And this is expected to unlock some sustainable cost savings on an annual basis of around $100 million a year. And we are also pursuing other opportunities, as John mentioned earlier to improve cash generation from this business. Turning now to the final area that I really wanted to focus on in a little bit more detail, and that is portfolio replenishment and growth. In a depleting industry, such as mining, these topics often become blurred with one another. But they are absolutely critical for long, long term cash generation. In copper, we rarely do here have a very, very attractive set of growth options that sequence very well over the next 10 years from a cash generation and a capital allocation perspective. I often get asked, why don't you accelerate your copper program because you've got all these options. Well, if we could, we would, because copper development is not constrained by capital availability. But absolutely by the rate at which permitting can be achieved. So just to be clear, copy sequence like this quite naturally, because this is the rate that we can progress that in terms of the way that we think and the timing we can achieve permitting. The timeline already, in our view, has been massively expedited. And it would probably have been far, far longer. If you have a look at other examples in the industry, of how this is progressing. We're at not for the people that we have on the ground, and the decades of experience that we have in the relationships that we have created and developed with the communities, with the governments and with the NGOs over those years. I sincerely believe that no one is better placed than us. And we have the examples of that right across the portfolio to develop these types of projects. At Collahuasi, this is a tremendous ore body, as we know. The potential there is quite staggering. We have pathways now, to near on doubling the production to around 1 million tonnes per annum on a 100% basis in the early 2030. We have already delivered the first step on that pathway with the startup of the fifth ball mill. And we are now progressing the approvals of a number of a number of relatively low capital intensity, high return debottlenecking projects. The Big Bang at Collahuasi of course, is another line another concentrator line from milling to flotation and tailings call that the Big Bang if you like, which we hope to couple with our CPR technology. And that is now in the process of commencing its permitting runs. If we were to progress this route, then permitting is expected by 2028. At which point in time construction could start just thereafter, which is why the production from Collahuasi any Collahuasi expansion is early 2030. Quellaveco has just delivered one of the fastest ramp ups to full capacity in the industry. Our autonomous technologies there are performing very well, and the plant is running extremely well. And to put a few specifics around that it is operating now, as one of the top three performing as it has at Quellaveco top three performing shovels in the group. And last week, plant performance was nearly 10% above its design capacity. I think these are great examples of the results that Matt and his team are helping to deliver. And they are bringing that to bear across the business in a really powerful way. At Quellaveco, these provide a solid foundation for us for operational improvements in the future at mine that is only now just at the very start of its life. So opportunity abounds there, I think. We are progressing the studies now for a staged expansion pathway targeting an initial step up in throughput rates in the next few years. And that would see an additional 20,000 tonnes per annum being added to their productive output. And the permit for that process is due to be submitted a little bit later on in this year. Los Bronces remains an incredible ore body. And it is important to recognize the merits of having a permitted operation in an established copper jurisdiction. To that end, we will continue to progress the engineering studies of the underground as well as pursuing industrial synergies with our neighbor, another one of those core productions that we think could bring great value, if we were able to get it right. The underground construction expansion will be worth the wait I believe there we have grades of over 1.5% and in conjunction with the open pit, the underground and the return of the Los Bronces plant Los Bronces as an operation could get back to 350 to 400,000 tonnes of copper produced per annum for a very long period of time. There not many ore bodies that lend themselves to that level of production for that duration. And finally Sakatti, a very high grade polymetallic greenfield option in Finland. And what do I mean by high grade we'll just copper there itself is 1.9%. And overall, that ore body has a copper equivalent grade of 5.2%. It could deliver 100,000 tonnes per annum of copper equivalent over a mine life that could extend to just beyond a couple of decades. And that would be at a very highly capital intensive cost position. We would expect the byproducts that we get from that business to put us into a, very attractive negative cost curve position. And the EIA for that project is extremely well advanced. The first step of that was the approval by the finish authorities in August late last year. And now we are working with those authorities to take the permitting to the next stage, which is in Brussels, given that this is a resource that sits in an EU classified natura 2000 area. We are hoping to bring this online also in the early 2030s. And the project has received a significant amount of recognition during its permitting process for its innovative and state of the art mine design that incorporates learnings from both Quellaveco, and from Woodsmith. And on that note, turning to Woodsmith, really great progress is being made here from the team during the year. And delighted that so many of you were able to be there and see that back in October of last year, the work on the market development side is going very well. And at that pace, and we have now sold some seating tons well above the current market price, I hope that you got a good sense of that when you were out there. And the time is just spent speaking with Tom and the team. 2024, of course is a really important year for us, right, because this is the year where we intersect the sandstones. And I think in many respects, this is the year that we define the economic viability of this project. By the middle of the year, we will be in them for sure. And at this particular point in time, having just scratched the surface of some of them, we believe that we are making good progress in terms of what the original plan thought. About 40 plus percent improvement in our progress through the area that we're in now relative to the same area in the server shaft during the course of last year. I think that's in a very large part thanks to El, who is through his element six business providing the lab grown diamond robots. And I just genuinely can't think of a better use of lab grown diamonds than digging up the earth. The remaining studies are on track and we do expect to take this project to our board for full notice to proceed approval during half one of 2025. This would put us in a very strong position I think then to maximize the value of syndication and we are working very hard to identify the right partner and the right opportunity. True industrial synergies are very, very rare, and can only ever really be realized from actions such as pooling endowments, and sharing of infrastructure. Now the value opportunities that we can unlock from integrating Vales neighboring Serpentina ore body into our Minas-Rio mining and processing infrastructure into one single optimized operation. Combined with the option to access Vales rail and port logistics, I believe are quite extensive. The sheer scale and quality of that Serpentina ore body offers a very significant value uplift to us including through the scope to expand production to a premium guide pellet feed product that we could sell to steel making customers as they to have the urgent need to focus on decarbonizing their own processes for decades to come. Serpentina contains a resource of 4.3 billion tonnes of iron ore with a significantly larger total endowment upside that reflects the total strike length of that ore body, which is more than twice that of Minas-Rio today, it is an even higher ore grade, then Minas-Rios already high grade feed and it contains predominantly softer friable ore, that is expected to translate into lower unit costs and capital requirements. Now, this enables a very significant reduction in the future capital investment into mining on a standalone basis and the processing kit on a standalone basis that would have otherwise have been needed at Minas-Rio as it moved from the predominantly as it moves into the predominantly harder it itabirite ore in the middle of the next decade. Now, the combination of these two resources also offer very considerable expansion opportunities and that includes the potential to possibly double towards 60 million tonnes per annum of very high grade pellet feed product as well as increasing the life of that asset. So under the terms of this deal, which we expect to close in the fourth quarter of this year, Vale will contribute Serpentina and $157 million in cash to acquire 15% shareholding in the large Minas-Rio, subject to normal completion adjustments. And they will also have an option to acquire an additional 15% shareholding in an enlarged Minas-Rio for cash, if and when the environmental licenses received for the expansion of Minas-Rio following the completion of a feasibility study, which we will run at fair value calculated at the time of that exercise. So to conclude, I am determined. I am determined to convert Anglo American once and full into a compelling investment proposition through the cycle. It can't be good just at the top and really struggle at the bottom, we will shape the business into a more investable and sustainable investment. We have short, medium, and long term plans in place, being safe and stable production as the critical enabler of both our portfolio improvement and our long term growth plans. These plans will create significant value for our shareholders through higher margins, and cash generation with attractive growth and improving returns potentials. I have my team in place. We are all working really hard with a clear focus and a clear understanding of what all of our roles are in getting everything done that I've just described to you. And now with that, we're very happy to take your questions. So as well as John and I in the room here. We have Themba, Al and Matt Daley, for all your hard questions around the fault at Quellaveco. And unfortunately, Ruben is traveling at the moment, so he's not with us. Jesse?

Q - Jason Fairclough: Jason Fairclough, Bank of America. I mean, you talked a little bit about the one adjacency the one that you've announced today. We had dinner last night with Glencore (OTC:GLNCY). That's another adjacency. What are the thoughts there? Why are you and Glencore and Tech not talking more about that? It seems like there's a lot of value on offer there.

Duncan Wanblad: There is Jason I mean, so I mean, I think the logic of that is very similar to that of Serpentina. Right. So one of those very rare opportunities where you get to either share a resource or share infrastructure, and the construct there is that there's a lot of infrastructure now in terms of water and plant, there's some fantastic high grade ore body at Collahuasi. So, you know, the industrial logic, on the face of it seems to be pretty obvious in terms of, you know, how we could extract value out of that. We are talking, right, but it is, as all of these sorts of things. It's a negotiation, and, and every party needs to win in a negotiation like that. But I assure you that there are discussions that are going on between the three partners, and the other partners, because there are number of partners on that particular joint venture to see if we can extract value outside of that potential expansion.

Jason Fairclough: I guess that's my question. So you're talking about the expansion of Collahuasi? Shouldn't plan A be the adjacencies?

Duncan Wanblad: Yes, you know, me, I'm a plan A plan B kind of guy, I want to be absolutely certain that we've got the right irons in the fire. As I say, you know, these types of synergies can take many years. I mean, the Serpentina deal was three years in the making. That's when we started it. And I think yesterday, when we approved it, it had been actually three years almost to the day, that those debates and conversations have been going on. And maybe not, not here, this price is pretty big. But I think both need to progress, because you don't want to take one and then takes two or three years longer, and you've missed another opportunity. But the key there will be at the point that you have to start allocating capital to the actual construction of plant.

Jason Fairclough: Okay, thank you.

Izak Rossouw: Good morning. Izak Rossouw from Barclays. Just as we are discussing Serpentina, it seems like you're giving up a lot of the upfront value in the business and Minas-Rio to understand obviously, it's a much better ore body and you will obviously then not have to spend all this capital beyond 2030. But could you give us a bit more details to understand that sort of value proposition?

Duncan Wanblad: Sure, I mean, I guess the logic of it makes an enormous amount of sense right. And so far is that if you understand the Minas-Rio ore body, it is comprised of this sort of friable ore, and then as we get deeper into the ore body, you go through a transition zone and then you get into the very hard itabirite. With the combination of these two ore bodies and so, the optimization of the higher grade ore from Serpentina going through the processing facilities in Minas-Rio, we kind of offset the need to compensate for that hardness with a lot of really expensive upfront combination kit being milling and crushing. That we would otherwise have to spend at Minas-Rio. So, we can from now as soon as we get permits, you know, we can start moving some of that higher grade ore into this plant. And you know, for sure that you optimize any operation with high grade ore. So that's the upside opportunity. So I don't really see it as giving up in the short term for the long run. But the long run value is extortionate there in the context of the quality and the size of that ore body. And the possibility to then actually, if the iron ore markets go in the direction, we believe that they are going to go in for high quality pellet feed, to be able to expand really, rather rapidly off that ore body.

Izak Rossouw: Okay, thanks. And then secondly, just on Woodsmith. Last year, when, at the time of the impairment, you mentioned the opportunity, if shaft sinking goes well, well, that there's a potential to save up to a $1 billion a year ahead of schedule is that still possible?

Duncan Wanblad: Yes. So, that those are roughly the metrics. So, based on based on the base plan of doing one meter a day through the sandstones, if you could do two meters a day, it's almost a year that you save. And as you know, that the cost to capital cost, there are almost like an operating cost. So the longer you're there, the more the costs are. So it makes sense.

Izak Rossouw: And is that progress? How's that progress going on?

Duncan Wanblad: Yes, very well, so, we're not in the sandstones yet. So Tom is not here, so I'm just looking around, he's, I don't think he's here. We're not in the sandstone yet. But we've run through a couple of sandstone lenses. If I'm perfectly honest with you, when we hit that sandstone lens, just before your visit, last year, we were doing like a meter every two weeks. So we were learning a lot about it, the team have adopted quite a lot of those learnings into change the design of the cutting drum, break the pics that we're using. And right now they're doing a little bit better than the meter a day in a similar sort of lens. But we're not into that solid rock yet. That we’ll get there sort of middle of this year, but very positive indicators.

Izak Rossouw: Thanks. A couple of questions, maybe on Woodsmith. First of all, could you confirm whether there are any active conversations going on now with potential partners always takes a long time? But it seems that there's a very strong intent to try and bring in the right partner. But have those discussions started? And what's the response like? Is there lots of interest or is there's not much interest?

Duncan Wanblad: So I can’t confirm that we are having conversations, we haven't set up a formal process as it stands at this particular point in time, as I said to you, in December, the most important thing for us is to be sure that we have the right partner at the right time. But, I mean, there has been inbound interest and we are also having conversations on bilateral basis with few people.

Izak Rossouw: Thank you. And then maybe just going back to the restructuring, because I guess over the years, we've heard you say, like anything's for sale at right price. But this seems very different in terms of the way you're looking at the business and the potential kind of assets that could come out of it. I mean, if we do what Stuart said at the beginning is basically everything except for iron ore. So copper and Woodsmith on the plate. Yes, so we could exit PGM, we could exit diamonds, we could exit nickel, we could exit coal. Is that the way we should interpret? What you and Stuart saying?

Duncan Wanblad: Well, I think, what we are saying is that there are three key demand drivers for the business, as we see them today. But at the same time, you also heard Stuart say, and you heard me say that every asset in the portfolio has to play its role. And if you have a really good cash generating asset that just doesn't happen to be one of those at that particular point in time, but has a reasonable life, then it could be very synergistic with the whole of the portfolio and being able to develop and support growth in those areas. So, that's the way I'd like you to think about it. In the context of the reviews that we're doing the asset reviews that we're doing this year, we have a very specific role in our organization. He's here in the room today, which is somebody who has a very specific job of understanding in a strategic context, the role of every single asset in the portfolio, both short and long term.

Izak Rossouw: Maybe just as a quick follow up, and then pass it on. There is a timeline around the strategic reserves, it sounds like they're happening right now, this year, but is that?

Duncan Wanblad: Yes, well, look, I mean, I think there's an urgency that's required on this thing and we need to move really quickly. There are some constraints to it, of course, that I want to be sure that we are cognizant of, you know, when you look at something like this interview, a number of factors play to what value looks like, and feels like so you know, the plan of the particular asset, the time in the cycle, that you're looking to make these decisions in, the frictional cost, potentially, of making any of these decisions at the wrong time of the cycle, these are all very, very important and have to play into the decisions that you're making. So I'm not going to tell you that, that there's a very specific date, which there's going to be a magic answer. And we're going to execute at that particular point in time, because that indeed could be very dilutive from a shareholder value point of view. But what you should take away from this thing is that there is an urgency to this, we are absolutely focused on it, and we are looking at it through every single asset, nothing is off the table.

Liam Fitzpatrick: Good morning, Liam Fitzpatrick, from Deutsche Bank, two questions just on Woodsmith. And I think all of the clarity on the portfolio is really good to hear. But should we read it as it's a prerequisite for Board approval to bring in a partner? And should we assume that this process will be timed along with the final approval expected in H1 in 2025?

Duncan Wanblad: Yes, when my Chairman stands up and says, we're working on the syndication of Woodsmith, I think it's probably going to be very difficult not to take the Board for the project to approval for the Board, that that doesn't have a syndication solution, either done or very, very close to being done at that particular point in time.

Liam Fitzpatrick: And then, one follow up just on the copper bridge that you showed, I think I'm right in saying that it didn't include the concentrator restart of Los Bronces. So is that an option? And what's the thinking there?

Duncan Wanblad: I mean it's certainly the restart of the concentrator, Los Bronces is absolutely an option, it's very much in our thinking, Matt, who's facilitating the running of the mine plans there is looking at the restart of that concentrator, probably closer to the end of this decade. What the constraint will be there is that, when we shut it down, what we really want to do is optimize that whole resource, which is getting the geometry of the mine, into the right shape, so it can sustain a sink rate that basically can feed 150 million tons of capacity every day. And therefore, in the intervening paradigm, we also taking care of our sustainability obligations, want to move that Paris caldera tailings dam, right. So it is one of those GIS TM classified dams that is potentially high risk because of its location. It's not high risk, technically, in terms of the way that it's managed and operated today, but the safest solution is to move it out. And we have a commitment to do that. So we're going to combine that the combination of those two things and our view of when those two will coalesce, will be closer to the end of the decade, which is when you would expect us to start that back up again. I think you need to sit closer to the front because I can only see at that level.

Alain Gabriel: Thanks, Duncan, this is Alan Gabriel from Morgan Stanley. Going back to Serpentina, your release this morning focused on the growth of this combined assets. What are you thinking of in terms of timeframes, CapEx, et cetera? And would the production and cost profile change in the next three years?

Duncan Wanblad: I mean, if so, naturally, the cost of production and cost profile is going to be impacted because this transition is in play today. We already moving in, but I think where in terms of what we've guided you. There's no change from that perspective. It's going to take in speaking to Ruben probably the best part of four or five years to kind of get to a point where we're in in the permitting process, and then the permitting process can take about that equivalent time amount of time to. At that particular point, we then have a decision to make as to whether we're going to actually run that expansion or not. So is it or isn't it not economic? So I think that's going to be sort of 10 to 12 years from now.

Alain Gabriel: Thank you. Second question, is the press article attributed comments to you on your openness to separating South Africa versus X South Africa assets? This proposal was absent from today's presentation, what would the rationale be of such a transaction? And is it something that you are contemplating?

Duncan Wanblad: I can't remember that article in terms of my openness to separate South Africa from non-South African assets, to be perfectly honest with you. But I refer you back to what I said in terms of that whole portfolio review and the role of every asset in the portfolio. I just like to say that we have a capability of running assets extremely well in South Africa, the single largest cash contributor to Anglo Americans portfolio today's Kumba, and it is in South Africa. And just two years ago. This is how quickly things change. Of course, as people forget, sometimes, two years ago PGMs delivered a $7 billion contribution to the group's EBITDA. All out of South Africa. So this isn't a decision on South Africa versus the rest of the world. This is a decision on the commodity on the asset itself, our ability to derive value out of those assets in terms of the complexity or the simplification, et cetera, that and the role that that particular asset has in the portfolio in supporting a very clear strategic objective to support the business under those three key trends that we speak about.

Alain Gabriel: Thank you.

Duncan Wanblad: I'm going back. Sorry, Richard, I'm coming to you next.

Christopher LaFemina: Duncan, its Christopher LaFemina from Jefferies. So the billion dollar OpEx reduction plan, it's an impressive number, so it would be a 10% increase in your EBITDA from last year to deliver that over 12 months is very impressive. So the question I have about that, first is, how much of those cost reductions are a function of weak markets and some capacity have taken offline and their cost of a comeback in a recovery? And the second question, kind of related to that. Is there an associated revenue impact, or other kind of negative consequences as a result of these cross cuttings? If that makes sense. Thanks.

Duncan Wanblad: I'm going to ask John to make a comment on this too. But fundamentally, other than the restructuring of Los Bronces, which we really fully expect to bring back into production closer to the end of the decade, none of the costs that we're taking out today, should come back into the business at the current production profiles. To the extent that we were to start to expand the business in any of these acid things, and I think you would expect some of these costs to come back very mine, some of these are going out, because we had big expansion plans almost everywhere. And we were set up to kind of do that. Now we've deliberately decided not to do that those costs must come back out of the business. So there's nothing that is directly related to market that immediately market swings, you would say is coming back, unless there was an expansion associated with that particular asset, which you would be clearly aware of long before that happened.

Christopher LaFemina: Even higher prices would not drive reversal of some of those costs.

Duncan Wanblad: No, I mean, this has got to be the ultimate trick in mining right. Is even when you're in higher price zones, you want to be sure that you are appropriately structured for the bottom of the cycle, unless you are expanding, and then that expansion needs to be robust at the bottom of a cycle too. John, did you want to add anything on cost?

John Heasley: No, just on the point on ambition then. This has not been a blunt instrument has been applied, it's been very, very thoughtful. The billion dollars are split in two. So the first is the corporate take costs. That was a very detailed process through the course of 2023. That's done. So that cost has already gone and will be realized, as I said, and feel this year. So you can have real high confidence in that. The other $0.5 billion is, you know, we quantify that in December, but it's very complex, as you've seen with the South Africa announcements this week, that's more than 4000 jobs, consultation, et cetera, et cetera. So it's a thought through very detailed bottom up process of confidence in delivery is high. And then we will see the benefit of that next year.

Duncan Wanblad: Richard?

Richard Hatch: Thanks. Good morning, Richard Hatch from Berenberg. Two questions. The first one, if I look at the portfolio, there's three assets that kind of jump out as being challenging at the moment amendable in PGMs, current price kind of holding it up. The second is Nickel, which, you know, the current price looks like it's, you know, cash neutral left after CapEx. And then De Beers is no negative return on capital employed. Is there a consideration here that you need to start? You know, tempering volumes, putting these assets on some form of care or maintenance for a period of time I appreciate it's difficult to be is obviously challenging given the Botswana relationship amendable difficult because 13,000 people were there. And it's, you know, it's a challenging one as well. So, how do you stop these assets from kind of bleeding cash in a period when you need to conserve cash? Yes, first one.

Duncan Wanblad: Yes. It’s a very good question, and an exactly the right one. I'm going to ask Al to talk to De Beers and what he's doing to stop bleeding cash. And I'll talk to Amandelbult and nickel. So Amandelbult both currently is cash positive. Okay, very important to understand that. In our portfolio in the event that that PGM prices continued to fall and stayed down for longer, Amandelbult is probably and, but particularly, is probably the place that we would have to go to, to deal with, with cash negative ounces. So in the same way, we dealt with that, at Los Bronces, cash negative tons, which we saw persisting over a reasonable period of time. That's so important. So the cycle question is very important when you make these decisions, because they have major consequences to people, to communities, to governments, and then to the structure of the business. Because bearing in mind, every time you take people out of a business like that to temporarily shutter production, you change the mine plan. And if you change the mine plan, the transition from one plan to another plans, 12 to 18 months, and so you've got to be really sure that is the right thing to do. But, just waiting isn't good, either, right? So what you're seeing us doing is acting early, but without cutting the throats of the viability of that business. But absolutely, Richard, if the PGM markets persist and continue to decline, we would have to take more action and that action would then go directly to removing ounces out of the business. But when you remove them out, you remove everything that goes with those answers, and they don't come back very quickly. Once you’ve done that, so very important to make to make that clarification, Amandelbult is cash positive at this point of time. Nickel is in a difficult space. You know, certainly in terms of what we're seeing coming out of Indonesia, at this point in time, there's quite a lot of pressure on nickel, so nickel is actually, quite clearly one of our best run businesses, you know, if you have a look at every single operating metric for that business, it's sort of shoots the light out one of the most stable businesses that we've got and one of the most optimized in terms of cost management and capital management. But with nickel prices, sort of languishing around $14,000-$15,000 a ton. It's hard yards for barrel to. I'm not giving up on that team, to see if they can reconfigure themselves just in the time being. So they will also be part of the acid review to see where it comes. But you know, they can't end up with a minus $5,000 per ton cost impact for a significant period of time. Okay, Al.

Al Cook: So it's a good question, and one that exercises us a lot. I think the first thing to say is we work with our partners, particularly the government of Botswana, and the government of Namibia. But we're aligned with them in producing into demand and not prioritizing volume over price. So there isn't a big disconnect there. Maybe the best way to answer your question is to look at 2023, what did we do and in 2024 what can we do? So 2023, we had two levers to produce into demand. And as the market fell off, in the second half of the lever in the second half of the year, we pulled both those two levers. So production in 2023, with 8%, down on 2022, we could have maintained production flat on 2022. If we'd wanted to we chose not to do that, which is why you see the production 8% down. But beyond that behind those production figures, we also reduced our purchases. And the total purchase reduction on 2023 to De Beers was about $300 million, more or less. So when John quoted earlier, that inventory figure of $2 billion that would have been $300 million higher, if it wasn't for the purchases that we reduced. If we go into 2024, we'll take the same approach. So production reduction possibilities and purchase production possibilities. So we've got production levers that we can pull at Debswana in Botswana at De Beer Namibia, in Namibia, and Venetia in South Africa. And we'll work with our partners over the course of the year to see if the market continues being U shaped what should we do in terms of reducing production. But the second thing that we're doing is working with our partners on purchase reductions as well. And even so far this year, we've pulled some levers around purchase reductions to make sure that we maintain our inventory and have a negative trend, as overtime, we bring the inventory down. So there are things we can do and there are things we will do. But that principle of producing into demand rather than seeking to maximize volumes will be a fundamental tenant of how we work.

Richard Hatch: Thank you. That kind of feeds into my second point which is just on for John, for working capital. If you look at the business over the last sort of five years, it's ground a lot higher. And I appreciate part of that De Beers, forced your hand convert Transnet issues as well, right. But the business is working cap has just gone crazy, right in terms of how much cash is in there. So how are you thinking about trying to work that out? And how should we think about that over the next couple of years? Thanks.

John Heasley: Yes, no, you're right, there has been a big growth in working capital. And, of course, I do and we do think of that as cash, we know that, that is tying up our cash and therefore our shareholders cash, which is has to be a big focus. So if we look at working capital and the component parts, then, you know, I think receivables and payables are, you know, broadly, net-net, the common to a slight negative number, actually, so that fuels is probably not the root of the challenge the root of the challenge is in inventory, which sits today, approximately $7 billion. And you sort of break out what's in that inventory, then there's about a billion of raw material and consumable, so that could be the consumables on the mine, the tires, the middle liners, the pump parts, et cetera. Then there's about 3 billion of work in progress, which is inter process stockpiles. And then there's about 3 billion of finished goods. Where do we go for opportunity? On that 1 billion of sort of consumable items and raw materials, then, you know, big focus on our managing our suppliers accordingly, making sure we've got the stock levels appropriate that we're not carrying more than we need. The entire process stock piles, I'm slightly cautious on for all the reasons, Duncan has been talking around the importance of the main plans, and you sort of mess with those inter process stockpiles at your peril, but we will get them right. And so you know, the bigger area of focus is in that finished goods, and it comes to the diamonds, which makes up the majority of that 3 billion. So we have a big focus, and then organizationally, we're ensuring that our general managers on the main or country managers have the information and the data to understand the importance of those working capital numbers and how they convert into cash. And we're incentivizing them appropriately to bring that down over time. So in terms of phasing, we will do all we can to bring it down. I think that, you know, it's probably not going to be immediate, but the immediate priority is to make sure we don't have another increase in working capital in 2024. And I'm confident that we'll avoid that.

Richard Hatch: Thanks for your time.

Duncan Wanblad: Sorry, I can't see through the lights. I can just see hands waving.

Julio Mondragon: Good morning, Duncan. Julio Mondragon from BMO capital markets. So just two questions going back to the corporate segment. The first one is you mentioned to get to the 1 million tonnes per year, mid to 2030s. Demand, one of the main restrictions is the permitting of this project. So considering that in the next two, three years, you will have a wave of central government and local government elections. What are your thoughts on your relationship with these stakeholders? And the second question is question is on Quellaveco. So what are the chances that you will face more impacts in your guidance, potentially in order faulting other areas of the pit?

Duncan Wanblad: Okay, thank you. Matt, will you take the Quellaveco question, when it comes to just relative to permits? I mean, a great question. I think that that's absolutely right. And absolutely relationships with governments and approving authorities is extremely important. But by far and away, what is most important in terms of permit acquisitions is your relationship with the communities will have a voice in the consultation as to whether they are going to be advantage or disadvantage by any mining activities that happen around them. And it is our experience without a doubt, that to the extent that your communities are really confident and happy with what it is that you're saying and believe that the benefit is net positive to them, then the process of actually, running through the bureaucracy, with regard to permit approval in the many different agencies that you have to deal with, is definitely a lot easier. I think it's a fallacy to believe that if you have an excellent relationship with a national government, that you would get permits any quicker, if you didn't have an excellent relationship with the community. So our primary focus is on our relationship with our communities and what it is that we do in proper consultation with them to come up with, with win-win solutions for both of us. Having said that, where you have any change of administration, and where there isn't any political inputs into the change of the leadership in the bureaucracies, in terms of the diplomatic services. Then you inevitably suffer a little bit of lag in the process. So the process is generally well prescribed, relatively well understood and relatively well followed. But then you just have the catch up of new people at the top of authorities having to catch up with the background and the history. By and large, I would say that in terms of, in a jurisdiction like Chile, it has a relatively mature permitting process. And a good permitting process, then, you know, the fundamental requirements in terms of content of purchasing, we think is absolutely valid and good. It has also a very clear objective to reduce permitting complexity. Now, what I mean by that is not, we're going to approve permits more easily, we're going to reduce the content requirements of these permits, but they're going to focus quite a lot more on the connection between the multiple different authorities that have to approve the permit. So, get a coordinating body. And I see that as broadly positive, and in many ways, an offset to any change of personnel in that process. I mean, we have, you know, our permitting timeline horizon, expectations have definitely extended over time, where it should take you, you a year to get a DIA, I think we would probably more budget two years for that sort of thing now. So I think what you're seeing in terms of our thinking, and timing of permit acquisition, in many of these projects, has built in our experience and our view of what we can see coming forward at the moment. But it is, it is a very sensitive issue. And again, just come back to the fact that the most important thing to get right, is the relationship that you have with the communities.

Julio Mondragon: Okay. Second question,

Duncan Wanblad: Matt. Yes, please, Quellaveco.

Matt Daley: Thanks for the question. Really good question. So a little bit of context. So as you move from a feasibility study, where you're working off a data set of geological infield drilling, hydrogeological, drilling and geotech drilling, you got a certain database of information into where we are today, actively mining through these phases, obviously, your database of information increases dramatically. So what we've got now is geotech, models with a very high level of confidence. So whilst we're having some short term rescheduling of copper, as you see the slope angles move, confidence levels as we moved through the P&L are extremely high compared to where we were during feasibility study. So a very high level of confidence now that we understand what's happening in the mine design and will be set up for future phases. Guess (NYSE:GES) the other positive we're seeing is the fault zones got a combination of structures, which are running both parallel and sub parallel to the pit slope. So positive for us is we believe that as we mined back into the mountain, you're actually mining through some of these structures. And you'll have lesser impacts as your mind into further phases. So, very positive outlook and in fact, the more we learn about this ore body, the more we like it, and Duncan talked about some of the throughput rates, we're currently getting some of the trade-offs in the structures and the rock mass strength is we're getting higher throughputs now through the concentrator, so looking very positive.

Unidentified Analyst: Just two very quick questions. Firstly, on De Beers, you have a 7 billion carrying value still for a business, which made no EBITDA and even in good times, it was making about a $1 billion of EBITDA. So what kind of cyclical recovery are you building it on that sort of 7 billion still sort of carrying value? And secondly, the third adjacency, that you talked about, with Los Bronces? I mean, with every site, was it for the last 20 years? That's always been an obvious one. What's changed for that, to kind of come to the full?

Duncan Wanblad: John, do you want do you want to deal with a carrying value?

John Heasley: Yes. So, as you know, the impairment assessment is part of the annual process before the methodology which is pretty standard, the key assumptions in terms of valuation long term price is, is there you know, RPI assumptions, economic growth going forward. Clearly the assumption around lab grown diamonds and where that goes. And I think that we've explained that we see that sort of bifurcating through time. And of course, we're seeing the growth in demand, certainly slow for lab grown diamonds, and through time, they will become quite different products. So, in terms of the 7 billion carrying value, it's a sort of discounted cash flow basis. And of course, in a discounted cash flow, it's always around long term price is a big driver. And so the impairment that we've taken is really reflective of that short to medium term impact of lower, RPI lower sort of demand for luxury goods, as I say them in my prepared remarks. So really, it's about I would refer to more of a U shaped recovery. And that's the assumption that sits behind the remaining carrying value.

Duncan Wanblad: And from on the Los Bronces, Andina synergy, so, yes, I mean, you know, I've been looking at that for many, many years in two of my previous roles, and this one. So you're right, it's been a long time coming. I'd like to say that we have made quite considerable progress there, actually. And so we are already leveraging some of those potential synergies in terms of the easement agreements that we've been able to put in place, and the operating principles and protocols that we've been able to put in place with Andina, and certainly the relationship between Anglo American and Codelco and the mind management between Andina and Los Bronces is excellent, and very, very cooperative. The really big prize for us is to take to take this to the next step. But it is complicated. And I don't want to, I don't want to sugarcoat this in any way. There are some real constraints that are imposed on this by the Chilean constitution. And therefore to effectively do this and get this right, leads towards quite a complicated set of arrangements. Now, I am trying to simplify the business as opposed to add more complexity to it. To the extent that that, that there is complexity involved in this thing, then the headroom between the complexity of operations imposed by those sorts of agreements, needs to be significantly offset by the value at stake that can be achieved. What I can assure you is that the both of us Codelco and Anglo American, are absolutely working, we have dedicated work teams, and have had for just over a year now, since we got the permit for the Los Bronces underground, trying to find a way to simplify some of this complexity and then get after these prizes. It's important for both of us and therefore, I'm a great believer that when you have an aligned objective, and it's equally important to both of you, we can find a solution to it. But it is it is complicated and therefore probably takes a little bit more time to it. But, it’s not like nothing has happened. I mean, it's a three phase project. We're in phase three of that project at the moment. So the first two phases have been very beneficial for both parties so far.

Stuart Chambers: Let me call it to close. Thank you very much indeed for those who are joining us. We're going over in that corner, go for a coffee break, grab a coffee and we'll kick off in seven minutes. Thank you.

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