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PGMs overtakes iron ore as the key driver for Anglo core earnings

28 march 2022

Anglo American recently released its financial report for the year 2021, which showed that its underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by $10.8 billion to $20.6 billion in 2021 compared to $9.8 billion in 2020.

The group mining EBITDA margin of 56% was significantly higher than 43% recorded the prior year, due to the increase in the price for the group’s basket of products and improved production at PGMs, De Beers and Kumba (Iron Ore).

Underlying EBITDA by segment



PGMs were the leading contributor to the group’s underlying EBITDA in 2021 as it increased to about $7,1 billion compared to $2,5 billion in 2020, as a result of a 36% rise in the PGM basket price, driven mainly by the higher average rhodium price, as well as an 82% increase in sales volumes.

Anglo’s PGMs business is held through a 79.2% interest in Anglo American Platinum.

It wholly owns and operates three mining operations in South Africa's Bushveld complex: Mogalakwena – the world's largest open-pit PGMs mine – Amandelbult and Mototolo.

Anglo American Platinum also own and operate Unki mine – one of the world’s largest PGM deposits outside of South Africa, on the Great Dyke in Zimbabwe.

It also had an interest in two jointly owned and independently managed mines – Modikwa and Kroondal, both located in South Africa.

Iron ore was second as its underlying EBITDA in 2021 rose to $6,8 billion compared to $4,5 billion in 2020.

The group's iron ore is mined by Kumba, which operates two open-pit mines – Sishen and Kolomela – both located in the Northern Cape of South Africa.

Anglo's integrated iron ore operation in Brazil, Minas-Rio, consists of an open-pit mine and beneficiation plant.

Underlying EBITDA for copper more than doubled to $4 billion in 2021 from about $1,9 billion, a year earlier, underpinned by record copper prices.

The average London Metal Exchange (LME) copper price increased by 51%, due to a strong recovery in economic activity following the initial waves of the Covid-19 outbreak in 2020.

While demand rebounded sharply in 2020 in China, momentum in 2021 was led by the US and Europe, as China faced headwinds in its real estate sector.

Anglo’s copper business is located in Chile where it has interests in two major copper operations: a 50.1% interest in Los Bronces mine and a 44% share in the independently managed Collahuasi mine.

It also manages and operates the El Soldado mine.

In Peru, it has a 60% interest in the Quellaveco project.

De Beers’ underlying EBITDA increased to $1,1 billion in 2021 compared to $417 million in 2020, reflecting the improvement in sales driven by the recovery in demand.

Anglo American owns 85% of De Beers and the balance of 15% is owned by the government of Botswana.

De Beers recovers diamonds from Botswana, Canada, Namibia and South Africa.


Anglo noted that the reconciliation of underlying EBITDA from $9.8 billion in 2020 to $20.6 billion in 2021 shows the controllable factors (for example cost and volume), as well as those outside of management control (such as price, foreign exchange, inflation and the impact of the pandemic), that drive the group’s performance.

Anglo American’s profit attributable to equity shareholders increased significantly to $8.6 billion from $2.1 billion in 2020.

Underlying earnings were stronger at $8.9 billion in 2021 from the previous year’s $3.1 billion, while operating profit was $17.6 billion compared to $5.6 billion in 2020.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished