Anglo American CEO Duncan Wanblad
JOHANNESBURG (miningweekly.com) – Anglo American CEO Duncan Wanblad on Thursday expressed delight at the energy announcement of President Cyril Ramaphosa, who has unveiled several far-reaching interventions, including a doubling in the allocation for the next renewables procurement round, an uncapping of the 100 MW licence-exemption threshold for distributed generators, and a proposal of a feed-in tariff for self-generating households and businesses, as part of a much-anticipated action plan for ending load-shedding.
“We’re delighted with the news,” Wanblad told a media conference covered by Mining Weekly.
In 2020, roughly one-third of the electricity Anglo American used globally was drawn from renewables. Having secured 100% renewable electricity supply across its operations in South America, by 2023 Anglo expects to be drawing 56% of its global grid supply from renewables.
The London- and Johannesburg-listed company has been working with partners and government to enter an environment where it can liberate energy constraints sooner rather than later.
The renewable energy ecosystem that Anglo is designing and implementing for Southern Africa will provide 3 GW to 5 GW of new energy, including the transmission and the distribution elements associated with that.
Wanblad described the President’s announcement as helping to smooth the regulatory issues to enable the right projects to be executed more rapidly, “so actually a very positive move for us, we’re very pleased with what the President said”.
On the overall green electrons and green molecules solution, he said in response to Mining Weekly: “It’s a very, very viable way forward, which is why we put so much energy and effort on developing that hydrogen truck, and it’s more than just a hydrogen truck, of course, it’s a little bit of the ecosystem that fits around that.”
The advance into green molecules had to start with the availability of green electrons and then there is a distribution system that goes into that, which only three years ago nobody thought would be possible to develop at scale.
“Well, here it is, and I think it’s probably going to develop much faster than anybody’s going to give it credit for, because the need for it is real and I think people are starting to realise that we’ll be in real trouble if we don’t get this transition, and I think mining is perfectly placed to be a very fundamental part of that solution.
“We’re not technology providers but look what we did on the hydrogen truck. We used technology, and we can develop technology, but what’s really important is that our minerals go into these technologies that will make this change.
“I think we are going to see an acceleration of the pace of the development and the commercialisation of those sorts of technologies, and that’s also, by the way, why we’ve tried to enter this joint venture and expansion project with First Mode, so we can bring some more capital to this, and we can put the commercialisation of these sorts of things on steroids,” said Wanblad.
On Anglo’s plans to convert its entire 400-unit mine haulage fleet to green hydrogen, Wanblad added: “We’re hoping to have the first of those rolled out towards the end of this decade and, to the extent that we’ve got great solutions, then the 400 trucks over the next ten or so years is what we would be targeting."
Financially, Anglo’s portfolio quality in the six months to June supported underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) of $8.7-billion, profit attributable to equity shareholders of $3.7-billion and net debt of $4.9-billion, which represents three times annualised underlying Ebitda.
The $1.5-billion interim dividend declared is consistent with Anglo’s 40% payout policy at a time when the multi-decade new Quellaveco copper operation in Peru is expected to produce an average of 300 000 copper equivalent tonnes a year over the first 10 years of operation.
As climate change-worsened droughts and floods impact operations, Anglo is intent on being a leader in environmental stewardship, with plans to reduce Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 30% by 2030; improve energy efficiency by 30% in the same period; achieve a 50% net reduction in freshwater abstraction in water-scarce areas; and deliver net-positive impacts in biodiversity wherever we operate.
Environmental performance continued to improve, with no Levels 5, 4 and 3 incidents in the first half of the year.
Both energy consumption and GHG emissions decreased in the first half of the year and Anglo remains on track to improve energy efficiency by 30% and reduce absolute GHG emissions by 30%, by 2030.
It aims to be carbon neutral across all operations by 2040, and has an ambition to reduce its Scope 3 emissions by 50%, also by 2040.
Anglo’s differentiated combination of portfolio quality and growth optionality, underpinned by its operating model and innovation track record, continues to position it strongly through the current market volatility and longer term cycle.
Its unwavering focus is on driving consistent performance across its operations – which starts with the safety and health of its employees – and progress towards its full suite of sustainability ambitions. "As we progressed through the first half, we began to regain operational momentum while also adjusting to the considerable challenges posed by Covid-19-related absenteeism, disrupted supply chains and logistics corridors, weather extremes and geopolitically-led economic volatility.
“Looking ahead, growing the value of our business by progressing asset development options is the foundation of our organic margin-enhancing volume growth potential of 30% over the next decade.
"More than a third of this growth comes from our newly commissioned Quellaveco copper operation. With our customer proposition almost entirely oriented around future-enabling metals and minerals, we are well positioned to play a critical role in the decarbonisation of global energy and transport systems, alongside good progress in meeting our own ambitious emissions targets, thereby delivering enhanced value for our shareholders and stakeholders across society," said Wanblad.