Anglo American has unveiled a major new phase in its strategy, making radical changes to its business structure to drive shareholder returns and reduce costs. This includes the divestment or spin-off of its steelmaking coal, nickel, platinum, and diamond operations.
Following an asset review initiated last year, the mining giant announced it will now focus on three main divisions: copper, premium iron ore, and crop nutrients. These remaining assets are part of what the company calls a “100% future-enabling portfolio,” aimed at supporting the energy transition, improving global living standards, and enhancing food security.
Anglo American anticipates growing demand for copper, which generated $3.2 billion in EBITDA last year, as the global economy continues to decarbonize through electrification. Premium iron ore, which earned $4.0 billion in EBITDA, is crucial for the steel industry’s decarbonization efforts.
The Woodsmith polyhalite fertilizer mine, expected to boost food production and sustainable farming practices, will see significant capex reductions to slow development while the company focuses on deleveraging its balance sheet. Despite this slowdown, the project’s long-term value potential remains intact.
“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction,” said Chief Executive Duncan Wanblad.
These structural changes are expected to increase the EBITDA margin significantly to an estimated 46% from 31% last year, cut costs by approximately $1.7 billion, and reduce leverage to less than 1.5 times net debt-to-EBITDA.
As part of the portfolio simplification, Anglo American will divest its Steelmaking Coal operations, with the proceeds directed towards resetting the balance sheet. The company is exploring options for care and maintenance and divestment in nickel to mitigate short-term market pressures. The platinum division will be demerged to optimize value, while the De Beers diamond division will be either divested or demerged following significant price declines over the past two years.
“Anglo American’s shareholders will see the full undiluted upside from these extensive changes, with the value of our copper and iron ore assets brought to the fore,” said Wanblad. “This next step in the transformation of Anglo American’s portfolio is set to accelerate the recognition of value that has been inherent in our business for many years and provide Anglo American’s shareholders with undiluted and differentiated participation in the major structural demand trends, while minimizing any frictional costs associated with this major portfolio transformation.” 
