Anglo American : 2021 Integrated Annual Report

Integrated Annual Report 2021

Our Purpose

Re-imagining

Revenue

Underlying EBITDA◊

Group performance

mining to

$41.6 bn

$20.6 bn

improve

2021

2021

$41.6 bn

$20.6 bn

2020

2020

$25.4 bn

$9.8 bn

people's lives

Operating profit

Underlying earnings per share◊

Transforming the very nature of

$17.6 bn

$7.22

mining for a safer, smarter, more

2021

2021

$17.6 bn

$7.22

sustainable future.

2020

2020

$5.6 bn

$2.53

Using more precise technologies, less energy and

less water, we are reducing our environmental

footprint for every ounce, carat and kilogram of

Profit attributable to equity

Net debt◊

precious metal or mineral.

shareholders

We are combining smart innovation with the utmost consideration for our people, their families, local communities, our customers, and the world at large - to better connect precious resources in the ground to all of us who need and value them.

And we are working together to develop better jobs, better education and better businesses, building brighter and healthier futures around our operations in our host communities and ultimately for billions of people around the world who depend on our products every day.

$8.6 bn

2021 $8.6 bn

2020 $2.1bn

Total dividends per share

$4.19

2021 $4.19

2020 $1.00

$3.8 bn

2021 $3.8 bn

2020 $5.5 bn

Attributable free cash flow◊

$7.8 bn

2021 $7.8 bn

2020 $1.2 bn

Group attributable ROCE◊

Number of fatalities

Cover image

At our Sakatti polymetallic project in northern Finland, women make up 43% of the workforce. Featured is safety, health and environment (SHE) field co-ordinator Liisa Kropsu during winter drilling activities.

43%				1
2021					2021
43%				1
2020					2020
17%				2
Total recordable case frequency		Level 4-5 environmental incidents
rate (TRCFR)
2.24				0
2021					2021	0
2.24
2020					2020	0
2.14

• Alternative Performance Measures
  Words with this symbol ◊ are defined in the Alternative Performance Measures section of the Integrated Annual Report on pages 270 to 275.

Contents

Portfolio

22

Innovation

30

People

50

Strategic Report

1. Our business at a glance

1. Chairman's statement

1. Chief Executive's statement

1. Our Business Model

1. Purpose to value

12 Creating value for all stakeholders

1. How we make decisions
2. Understanding our stakeholders
3. Our material matters

1. Looking at global trends

1. Reflecting stakeholder views in our Board decision making
2. Key decisions made in 2021
3. Portfolio

1. Innovation

1. People

1. Capital allocation

1. Managing risk effectively

68 Key performance indicators

1. Marketplace review

1. Group financial review

1. De Beers

1. Base Metals

86 Platinum Group Metals (PGMs)

1. Bulk Commodities

1. Crop Nutrients

1. Corporate and other

101 Non-financial information disclosures and footnotes

102 Disclosures related to the recommendations of the

TCFD

104 Streamlined energy and carbon reporting

Governance

1. Chairman's introduction

1. Directors

1. Executive management

114 Board roles and responsibilities

1. Board operations
2. Board activity

120 Board effectiveness

122 Stakeholder engagement

124 Sustainability Committee report

126 Nomination Committee report

128 Audit Committee report

135 Directors' remuneration report

139 At a glance

142 Directors' remuneration policy

146 Annual report on directors' remuneration

162 Statement of directors' responsibilities

Financial statements and other financial information

1. Independent auditors' report

1. Primary statements

177 Notes to the financial statements

256 Financial statements of the Parent Company

1. Summary by operation

1. Key financial data

262 Exchange rates and commodity prices

Ore Reserves and Mineral Resources

1. Estimated Ore Reserves

1. Estimated Mineral Resources

Other information

268 Glossary of terms

270 Alternative performance measures

276 Production statistics

1. Quarterly production statistics
2. Non-financialdata

1. Directors' report

1. Shareholder information

IBC Other Anglo American publications and legal disclaimers

Basis of reporting

The Anglo American plc Integrated Annual Report for the year ended 31 December 2021 is produced in compliance with UK regulations. Additionally, we have compiled this report using the Guiding Principles and Content Elements set out in the International Integrated Reporting Council's Framework.

Integrated Reporting aims to demonstrate how companies create value sustainably over time, for a range of stakeholders - consistent with Anglo American's Purpose, business approach and strategy. This report, therefore, includes a comprehensive overview of our material matters, in the eyes of our stakeholders, and the impact these matters have on the value we create.

Measuring performance

Throughout the Strategic Report we use a range of financial and non-financial measures to assess our performance. A number of the financial measures are not defined under IFRS so they are termed 'Alternative Performance Measures' (APMs). We have defined and explained the purpose of each of these measures on pages 270-275, where we provide more detail, including reconciliations to the closest equivalent measure under IFRS. These APMs should be considered in addition to, and not as a substitute for, or as superior to, measures of financial performance, financial position or cash flows reported in accordance with IFRS.

Units

'Tonnes' are metric tonnes, 'Mt' denotes million tonnes, 'kt' denotes thousand tonnes, 'Mct' denotes million carats and 'koz' denotes thousand ounces; '$' and 'dollars' denote US dollars and 'cents' denotes US cents.

Forward-looking statements and third-party information

This document includes references to the Anglo American Group, forward-looking statements and third-party information. For information regarding the Anglo American Group, forward- looking statements and such third-party information, please refer to the IBC of this document.

Non-financial information disclosures

Non-financial information in this report includes subsidiaries and joint operations over which the Anglo American Group has management or acts as operator. It does not include independently managed operations, such as Collahuasi and Samancor, nor does it include De Beers' non-managed joint operations in Namibia and Botswana, unless specifically stipulated.

We comply with all relevant non-financial reporting requirements, including those contained in sections 414CA and 414CB of the Companies Act 2006; the Financial Stability Board's Taskforce on Climate-related Financial Disclosures (TCFD); and the Streamlined Energy and Carbon Reporting (SECR) rules. The tables on pages 101-104 are intended to guide stakeholders to where the relevant non-financial information is included within our Strategic Report and other externally available Anglo American plc publications.

Our reporting suite

You can find this report and others, including the Sustainability Report, the Climate Change Report, the Tax and Economic Contribution Report, and the Ore Reserves and Mineral Resources Report, on our corporate website.

• For more information, visit: www.angloamerican.com/investors/annual-reporting

Social channels

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Anglo American plcIntegrated Annual Report 2021

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Strategic Report

Our business at a glance

Anglo American is a leading global mining company, with a world class portfolio of mining and processing operations and undeveloped resources, with more than 106,000 people working for us around the world, in 15 countries.

We provide many of the essential metals and minerals that are fundamental to the transition to a low carbon economy and enabling a cleaner, greener, more sustainable world, as well as meeting the growing consumer-driven demands of the world's developed and maturing economies. And we do so in a way that not only generates sustainable returns for our shareholders, but that also strives to make a real and lasting positive contribution to society as a whole.

• For more information, see our Tax and Economic Contribution Report See www.angloamerican.com/tec-report-2021

• Our overview video gives a complete introduction to what we do and our ambitions for the future See https://youtu.be/6TKaHzCT4YY

North America

800 employees(2)

$69 m wages and benefits paid(3) $42 m taxes and royalties(4) $112 m local procurement spend(5)

Canada 1

Brazil

4,100 employees(2)

$120 m wages and benefits paid(3) $524 m taxes and royalties(4) $1,029 m local procurement spend(5)

Peru

750 employees(2)

$57 m wages and benefits paid(3)					Brazil 2 1
$22 m taxes and royalties(4)	1 Peru
$1,176 m local procurement spend(5)

3 Chile

Product groups*	Chile
Diamonds
4,300 employees(2)
Copper
$378 m wages and benefits paid(3)
Nickel
$959 m taxes and royalties(4)
Platinum Group Metals
Iron Ore	$1,829 m local procurement spend(5)

  Metallurgical Coal

Manganese

Crop Nutrients

* Number within dot denotes number of operations, shown by product.

02	Anglo American plcIntegrated Annual Report 2021

Base Metals

Diamonds

Copper

Nickel

PGMs

$1,100 million

$4,011 million

$320 million

$7,099 million

Underlying EBITDA◊

Underlying EBITDA◊

Underlying EBITDA◊

Underlying EBITDA◊

5%

19%

2%

34%

Group underlying EBITDA◊

Group underlying EBITDA◊

Group underlying EBITDA◊

Group underlying EBITDA◊

32.3 Mct

2 greenfield projects

41.7 kt

4,299 koz

Production (100% basis)(1)

Peru (Quellaveco) and Finland

Production: Nickel

Production: PGMs

(Sakatti)

647 kt

Production

Bulk Commodities

Iron Ore

Metallurgical Coal

Manganese

Crop Nutrients

$6,871 million

$962 million

$315 million

$(41) million

Underlying EBITDA◊

Underlying EBITDA◊

Underlying EBITDA◊

Underlying EBITDA◊

Woodsmith is a greenfield project

33%

5%

3.7 Mt

Group underlying EBITDA◊

Group underlying EBITDA◊

Production: Manganese ore

Corporate and other

40.9 Mt

14.9 Mt

$(3) million

Production: Iron ore - Kumba

Production: Metallurgical

Underlying EBITDA◊

and maps can be found in

22.9 Mt

→ More detailed information

Production: Iron ore - Minas-Rio

the business unit reviews

See pages 76-100

Finland

United Kingdom

1

Europe

2,800 employees(2)

$452 m wages and benefits paid(3)

$402 m taxes and royalties(4)

$619 m local procurement spend(5)

Shanghai

Other Africa

6,600 employees(2)

$334 m wages and benefits paid(3)		Singapore
$721 m taxes and royalties(4)
$495 m local procurement spend(5)

Australia/Asia

2,800 employees(2)

$484 m wages and benefits paid(3) $416 m taxes and royalties(4) $1,570 m local procurement spend(5)

2 Botswana							Zimbabwe	1			Australia 1 5
2 Namibia					South Africa	1 2	5 1

South Africa

41,450 employees(2)

$1,813 m wages and benefits paid(3) $4,049 m taxes and royalties(4) $3,148 m local procurement spend(5)

See page 101 for footnotes.

Anglo American plcIntegrated Annual Report 2021

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