Anglo American has in the first six months of 2014 seen three of its employees lose their lives while others suffered injuries, coercing the mining group to res-strategise to find ways to counter causalities. The company says it will now focus in key areas of effective and sustainable safety management, leadership, planning, risk management, incident management and effective frontline supervision.
However, the company says it has for the first quarter of 2014 registered no loss of lives in its mines. The safety improvements have led to recordable case frequency rate of 0.74, a 31 per cent improvement compared to Fiscal Year 2013.
Anglo America has interest in gold, copper, diamonds, copper base metals as well as financial and technological companies and the group is geographically diverse with operations and developments in Africa, Europe, South and North America and Australia.
In a statement accompanying the company’s interim results for the six months ended 30 June 2014, the group’s CEO Mark Cutifan noted that “safety is the clearest indicator of how we are managing the business and is always my first priority.”
Though lives were lost and injuries suffered, there was vast improvement in business performance which reflects a greater focus on mining processes and costs underpinning the turnaround strategy. There was a higher volume recorded across most of the portfolio which consists of Copper, Platinum and diamond production as cash costs downed by two percent in real terms.
Cutifan observed that Anglo-American’s improved business performance, aided by depreciating producer currencies, somewhat counterbalance the headwinds of input cost inflation, the effect of platinum and lower prices, primarily in bulk commodities. “This performance underlines the merits of our business strategy of commodity and geographic diversification,” said the Anglo-American chief executive.
The group has resolved to allocate capital across its portfolio by refocusing on assets that offer great source of potential value over the short and long term and the company says the strategy match its chosen areas of focus and skills to drive returns.
In platinum, Anglo-American says it has already outlined plans to reposition the portfolio through the planned divestment of Rustenburg and Union mines and instead shifted its interest in the Pandora JV operation. “We plan to divest a number of other assets at the appropriate time and to redeploy that capital to support our drive for higher returns,” Cutifan said, adding that the expectation is that divestments and improved business performance will support a long term net debt target of $10 to $12 billion. Furthermore, he observed that the first six months of 2014 for the mining industry has seen on-going soft demand and declines in average realised prices for most of the commodities Anglo-American produces as compared to both the first half of 2013 and 2013 as a whole which reflects uncertainty surrounding global economic growth prospects in the developed and developing economies.
“As we look at the global economic outlook, uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets,” Cutifan said, expressing optimism that due to diversified portfolio positions them well for the potential significant further urbanisation and industrialisation required to support a growth in China and other emerging economies.