Anglo American PLC
Materials
North America
Investment summary

Anglo American is one of the largest global mining companies. The company produces diamonds (32.3Mct, 5% of the Group's EBITDA in 2021), base metals such as copper (647kt and 19% of EBITDA in 2021) and nickel (41.7kt and 2% of EBITDA), PGM (4.3moz in total including 2.4moz of platinum, 1.6moz of palladium and 347koz of rhodium together generating 34% of Group's EBITDA); bulk commodities - iron ore (40.9mt in Kumba and 22.9mt in Minas-Rio and 33% of EBITDA), metallurgical coal (14.9mt and 5% of EBITDA), Manganese ore (3.7mt and 1.5% EBITDA) and crop nutrients (greenfield). The largest producing regions for the company are the Americas and Africa. De Beers (Anglo American owns 85% stake) is the global leader in diamonds. Anglo American owns an effective 79.2% interest in Anglo American Platinum Limited, a leading producer of PGMs - platinum, palladium, rhodium, iridium, ruthenium, and osm... Anglo American is one of the largest global mining companies. The company produces diamonds (32.3Mct, 5% of the Group's EBITDA in 2021), base metals such as copper (647kt and 19% of EBITDA in 2021) and nickel (41.7kt and 2% of EBITDA), PGM (4.3moz in total including 2.4moz of platinum, 1.6moz of palladium and 347koz of rhodium together generating 34% of Group's EBITDA); bulk commodities - iron ore (40.9mt in Kumba and 22.9mt in Minas-Rio and 33% of EBITDA), metallurgical coal (14.9mt and 5% of EBITDA), Manganese ore (3.7mt and 1.5% EBITDA) and crop nutrients (greenfield). The largest producing regions for the company are the Americas and Africa. De Beers (Anglo American owns 85% stake) is the global leader in diamonds. Anglo American owns an effective 79.2% interest in Anglo American Platinum Limited, a leading producer of PGMs - platinum, palladium, rhodium, iridium, ruthenium, and osmium. The company benefits from a high-quality resource base located in the biggest known PGM deposit in the world - the Bushveld Complex in South Africa and operates the Unki mine in Zimbabwe - the world's largest PGM deposit outside South Africa. The company benefits from a large scale of operations and expects a sustainable demand in key company segments. Anglo American is the world's third largest exporter of metallurgical coal for steelmaking from Australia's operations. Anglo American completed the exit from thermal coal operations in South Africa and Colombia in 2021-2022. Focus on growing segments of PGM and base metals will support the revenue and EBITDA performance.

Details
Ticker
AAL.L
Trading currency
GBp
Last close price, (currency)
2,728.0
Common shares outstanding
1,337,577,910
Preferred shares
0
MktCap, (currency) mn
44,447
Target price
Current opinion
Description

Anglo American PLC is a UK-based mining company. The company has a portfolio of mining operations with a focus on diamonds, copper, platinum group metals, iron ore, coal, nickel, and manganese. The company's segments include De Beers, Copper, Platinum Group Metals (PGMs), Iron Ore, Metallurgical Coal, Nickel, Manganese and Crop Nutrients, and Corporate. De Beers is engaged in the diamond business, which offers rough and polished diamonds. PGMs segment includes platinum, palladium, rhodium, iridium, ruthenium, and osmium. Iron Ore operations provide customers with iron content ore through assets in Brazil and South Africa. Metallurgical Coal is an exporter of metallurgical coal for steelmakin... Anglo American PLC is a UK-based mining company. The company has a portfolio of mining operations with a focus on diamonds, copper, platinum group metals, iron ore, coal, nickel, and manganese. The company's segments include De Beers, Copper, Platinum Group Metals (PGMs), Iron Ore, Metallurgical Coal, Nickel, Manganese and Crop Nutrients, and Corporate. De Beers is engaged in the diamond business, which offers rough and polished diamonds. PGMs segment includes platinum, palladium, rhodium, iridium, ruthenium, and osmium. Iron Ore operations provide customers with iron content ore through assets in Brazil and South Africa. Metallurgical Coal is an exporter of metallurgical coal for steelmaking and serves customers throughout Asia, Europe, and South America. The company is managing operations in Chile, Peru, Brazil, South Africa, Botswana & Namibia, Australia, and others. Copper is the largest segment in terms of copper equivalent production volume, followed by PGM, steelmaking coal, iron ore, diamonds, and nickel.

Industry view (TAM)

Global copper mining reached 20.6mt in 2020, while refinery production was at 24.5mt. Leading copper-producing countries include Chile (5.7mt mined copper in 2020), Peru, China, Congo, USA, Australia, Russia, and Zambia. Leading copper miners worldwide are Codelco (Chile, 1.728mt in 2021), Freeport-McMoRan (USA, 1.21mt in 2021), Glencore (Switzerland, 1.196mt), BHP (Australia, 1.045mt), Southern Copper (Mexico, 958kt), First Quantum Minerals (Canada, 743kt), KGHM Polska Miedz (Poland, 562kt), Antofagasta (UK, 486kt), Zijin Mining (China, 477kt), Anglo American (UK, 463kt). China is the largest consumer of refined copper with the demand estimated at 14.4mt in 2020. Reserves of platinum group metals worldwide amounted to 70kt in 2021, including 63kt in South Africa, 4.5kt in Russia, 1.2kt in Zimbabwe, 900t in the USA, and 310t in Canada.

Pros
  1. Anglo America has a world-class resource base supporting its production growth profile
  2. The large scale of iron ore and copper operations, as well as PGM, helps the company to maintain a relatively good cash curve position vs peers
  3. Anglo American exited the thermal coal business and focuses on sustainable products
  4. The company declared a dividend policy with a 40% payout ratio, with higher dividends paid when the industry is high in the cycle.
  5. The company benefits from a stable financial position and relatively high margins through the cycle.
Cons
  1. The company is exposed to volitive base metals and iron ore prices
  2. Steelmaking business is weak in 2022 due to lockdowns and weak real estate business performance in China
  3. The company has production in Latin America and Africa, where the political and regulatory situation may be unstable, and exposed to FX risk in countries of presence
  4. Social and environmental problems in producing regions may cause financial losses
  5. Growing inflation and soaring production costs negatively affect the margin
Risks
  1. Geopolitical risks
  2. Mining risks
  3. Risk of failure to replace a depleted resource base
  4. High product price volatility
  5. Social instability risks in emerging markets where the company has a presence
Historical price chart
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Peer Group (top 5)

Company RIC Market Capitalization, $mn Last reporting year P/E Fwd 1Y P/E Fwd 2Y EV/EBITDA 1Y fwd EV/EBITDA 2Y fwd EV/Revenues 1y fwd EV/Revenues 2y fwd
Anglo American PLC AAL.L 44,853 2022-12-31 8.2 8.5 4.3 4.3 1.6 1.6
Rio Tinto PLC RIO.L 112,729 2022-12-31 8.9 9.1 5.0 4.7 2.3 2.2
Glencore PLC GLEN.L 71,256 2022-12-31 6.9 7.5 4.1 4.4 0.4 0.4
BHP Group Ltd BHP.AX 150,260 2022-06-30 9.9 9.8 5.3 5.2 2.9 2.8
Antofagasta PLC ANTO.L 18,117 2022-12-31 27.7 26.3 7.2 6.7 3.6 3.5
Boliden AB BOL.ST 10,497 2022-12-31 10.7 10.9 5.6 5.7 1.3 1.3
Financials
2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenue 26,243 27,610 29,870 25,447 41,554 35,118 36,102 35,626 35,373
Growth 5% 8% -15% 63% -15% 3% -1% -1%
EBITDA 7,717 7,997 9,389 9,457 17,354 13,430 13,712 13,245 12,979
EBITDA margin 29.4% 29.0% 31.4% 37.2% 41.8% 38.2% 38.0% 37.2% 36.7%
Net income 3,166 3,549 3,547 2,089 8,562 4,514 5,236 4,755 4,489
Net margin 12.1% 12.9% 11.9% 8.2% 20.6% 12.9% 14.5% 13.3% 12.7%
Net debt 4,171 2,404 4,389 6,347 4,474 6,428 6,428 6,428 6,428
MktCap 39,185 44,004 55,050 52,528 52,528 52,528 52,528

Historical Multiples

2019 2020 2021 2022 2023 2024 2025
EV/Revenue 1.5 2.0 1.4 1.7 1.6 1.7 1.7
EV/EBITDA 4.6 5.3 3.4 4.4 4.3 4.5 4.5
P/E 11.0 21.1 6.4 11.6 10.0 11.0 11.7
Charts