26th Oct 2005 08:00
Anglo American PLC26 October 2005 News Release 26 October 2005 Anglo American completes strategic review The Board of Anglo American plc ("Anglo American") has recently updated itsstrategy for its business and has reached a number of conclusions about thefuture shape of the Group. The main thrust of these will lead to furtherrationalisation and simplification of the Group's portfolio and structure and anincreasing focus on controlled mining businesses which leverage the core skillsof the Group. Following this review the Board of Anglo American is announcing today a numberof initiatives to further the Group's strategic objectives: • Anglo American will continue to invest in growth projects in itscore mining businesses - platinum, diamonds, coal, base metals and iron ore -and will continue to evaluate acquisition opportunities in the mining sector. • To give AngloGold Ashanti (AGA) greater flexibility to pursue itsstrategic agenda, a decision has been made to reduce Anglo American'sshareholding in AGA. • Due to the different characteristics of the paper and packaging andmining businesses, Anglo American recognises that it may become appropriate inthe future to establish Mondi as an independent business in order to maximisevalue to shareholders. Anglo American will continue to support the growthopportunities which exist for Mondi, whilst retaining flexibility in respect offuture strategic options. • Returns from the Group's industrial minerals division, Tarmac, willbe improved through a programme of refining the portfolio including turningaround or divesting underperforming parts of the business. • Surplus capital, up to an amount of $1 billion, will be returned toshareholders via a share buy-back and/or special dividend during the course of2006. Tony Trahar, CEO of Anglo American said: "This announcement marks a further stepin Anglo American's ongoing strategic development. Through a series of measureswe are creating a more focused mining Group, better positioned to take advantageof opportunities in our main mining businesses." AngloGold Ashanti Anglo American recognises that its gold subsidiary, AGA, like all goldbusinesses, is valued differently from other mining assets by the equity capitalmarkets and tends to be followed by quite distinct investors. Following a detailed review of Anglo American's investment in AGA a decision hasbeen made to give AGA greater strategic flexibility by no longer seeking toretain it as a subsidiary. Although Anglo American's holding in AGA will bereduced, Anglo American currently intends to remain a significant shareholder inAGA in the medium term. AGA, which is independently managed, will be able to enjoy further flexibilityto pursue its corporate objectives as a result of a reduced Anglo Americanshareholding. Mondi Anglo American's paper and packaging division, Mondi, has grown verysuccessfully and is acknowledged as one of the best managed and positionedbusinesses in its sector. Anglo American will continue to invest in Mondi inorder to create shareholder value recognising the opportunity for continuedsuccessful development of this business. The business remains a strong profitand cash generator for the Group and has recently invested over $900 million inhigh return brownfields expansion projects. Further value should be derivedfrom these projects as they ramp up to full capacity and other high returnprojects will be undertaken to continue the successful development of thebusiness. However, due to the different characteristics of the paper and packaging andmining businesses, Anglo American recognises that it may become appropriate inthe future to establish Mondi as an independent business in order to maximisevalue to shareholders. Tarmac Anglo American's industrial minerals division, Tarmac, generates strong cashflows and the extractive part of the business enjoys synergies with the miningbusiness. Management has been tasked with improving the returns on capitalinvested in this business by turning around, restructuring or divestingunderperforming parts of the portfolio and pursuing further growth opportunitiesin its core business. The business will continue to be assessed on returns and growth possibilities inrelation to other mining opportunities. Anglo Platinum Anglo Platinum represents a key differentiator for Anglo American from itspeers, and is core to the mining portfolio. Anglo Platinum is uniquelypositioned, as the market leader and with an extensive resource base, to takeadvantage of increasing demand and to drive long-term growth. The achievement ofimproved operating cost efficiency and project delivery is a major area in whichshareholder value can be grown and remains a major focus for group management. Anglo American is exploring options as to how growth and investment can best besupported alongside an appropriate BEE transaction. Diamonds, Coal, Base and Ferrous Metals These businesses are undertaking a number of significant projects and areconsidering further expansion to meet growing market demand. Other Listed Subsidiaries: Highveld Steel and Tongaat Hulett The Board has reviewed the Group's investment in Highveld Steel and has decidedto dispose of its interest in this business. The Board of Tongaat Hulett has been requested to examine ways of unlockinggreater value for all shareholders. Capital Optimisation Anglo American's key capital management objective is the maintenance of a singleA credit rating through the cycle whilst retaining balance sheet flexibility topursue further growth opportunities as and when they arise. The strong cashflows currently being generated from operations will enable Anglo American topursue its $5 billion capital expenditure programme and to consider furthergrowth projects. The Board also intends to return up to $1 billion to shareholders via a sharebuy-back and/or special dividend during the course of 2006. Further announcements, as appropriate, will be made in due course. For further information, please contact: Investor Relations Media RelationsNick von Schirnding Kate AindowTel: +44 207 968 8540 Tel: +44 207 968 8619 Charles Gordon Daniel NgwepeTel: +44 207 968 8933 Tel: +27 11 638 2267 Anne DunnTel: +27 11 638 4730 Analyst Conference Call - 09.30 UK time / 10.30 SA time A conference call for analysts and investors will take place at 09.30 UK time /10.30 SA time, on 26 October 2005. The call will be hosted by Tony Trahar, CEOof Anglo American. Dial in numbers are as follows: Dial in numbers:Standard dial in: +44 (0) 1452 541077UK toll free dial in: 0800 073 1808SA toll free dial in: 0800 991 209US toll free dial in: 1866 245 0744 A replay facility will be available for one week:Dial In no: +44 (0) 1452 550 000Pin Code: 1791142 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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