JOHANNESBURG (miningweekly.com) – All policy in South Africa specifically relating to energy certainly does tend to be moving into a path of time and space where it really is incentivising the building out of renewable energy generation capacity in the country, said Anglo American CEO Duncan Wanblad on Thursday when the London- and Johannesburg-listed company reported its second-highest set of 2022 financial results following its record performance in 2021.

On the generation of renewable energy to alleviate South Africa’s electricity shortage, Wanblad said in response to Mining Weekly during a media conference: ‘We have 600 MW worth of projects keyed up ready to go at this particular point in time and quite a lot more on that 3 GW to 5 GW journey." (Also watch attached Creamer Media video.)

“I think the real issue here is the connection between policy, actual legislation and regulation, land acquisition and permitting all have to be finalised as well as the regulated tariff for access to grid and any wheeling that’s going to be required to make all of this work.

“But I’m very pleased with the way that things are being focused on at the moment and I think that widens the optionality tweaks around which some of this can be brought on stream,” said Wanblad.

Anglo's initial 600 MW of renewable energy, which the progresses to from 3 000 MW to 5 000 MW forms part of the company's Envusa energy programme, which has been given the status in South Africa of a strategic integrated project, which is welcomed as being very helpful.

"We are on track to commence the contract of the first two of these projects in that 600 MW bucket during the course of this year," said Wanblad.

Regarding green hydrogen implementation, he said the hydrogen truck, which was a prototype when launched in May last year, has been in the pit at Mogalakwena for a couple of months in an actual production application.

“So, it is presenting itself to the shovel, being loaded up and driving on the road with all the other trucks to the mine, getting wither to the product dump or the waste dump. Engineers are taking lots of data, and they are now in the process of designing the next version of this, which will come to trial in the next year or so, and that’s performing very, very well and exceeding our expectations.

“From the green hydrogen perspective itself, that is one of the areas that is developing also rather rapidly. The team is now working with the deployment of hydrogen, either by gas or liquid, to the truck and there are lots of players that are working with us to look at this. To the extent that this environment again becomes capacitating, there is opportunity to accelerate, and that’s what we’re looking to do,” added Wanbald.

Portfolio quality, diversification and growth support delivered underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) of $14.5-billion last year, Anglo stated in a release.

Other financial highlights for the year ended December 31 included profit attributable to equity shareholders of $4.5-billion; net debt of $6.9-billion involving cash generation offset by investment in value-adding growth; the Woodsmith polyhylite project in the UK impaired by $1.7-billion owing to extended development schedule and budget, designed to deliver maximum returns over long life of asset; the Quellaveco copper mine in Peru commissioned on time and on budget, with the multidecade copper operation ramping up; and a $0.9-billion final dividend, equal to $0.74 a share, consistent with Anglo’s 40% payout policy.

EXTREME WEATHER IMPACT

“We continued to feel the effects of dislocations in the global economy on our business in 2022 – in energy, and across supply chains and labour markets. Extreme weather has disrupted the lives of so many, with exceptional rainfall also setting back several of our operations, while the energy crisis caused policymakers to react to mitigate sharply higher inflation. With that backdrop, we built momentum during the year with our focus on regaining operational stability and targeted incremental performance improvement.

The underlying Ebitda of $14.5-billion is a 30% decrease compared with the record achieved in 2021, reflecting inflationary headwinds and higher energy prices combined with lower production volumes which, together, lifted Anglo American's production costs amid dampened prices for many of its products.

The return on capital employed of 30% was twice the targeted 15% through-the-cycle return, and mining's Ebitda margin for 2022 was 47%.

“The fundamental demand picture for future-enabling metals and minerals – particularly those that are responsibly sourced with traceable provenance – is ever more compelling. Our new Quellaveco copper operation in Peru increases our global production base by 10% and is the cornerstone of our value-adding growth potential of 25% over the next decade, with further optionality beyond, from copper to crop nutrients. As most of the world’s major economies accelerate their decarbonisation efforts and as the global population increases and continues to urbanise, we aim to keep growing the value of our business into that demand,” said Wanblad.