At Anglo American plc's Annual General Meeting for shareholders
in London today, Sir John Parker, Chairman, and Cynthia Carroll,
Chief Executive, made the following remarks:
Sir John Parker, Chairman, Anglo American
plc:
My primary role as your chairman is to manage the Board, while
that of our chief executive Cynthia Carroll is to manage the
company day by day. I believe it is the Board's job to set the
drumbeat for the business by owning the strategy, empowering
management to execute it, and holding them accountable for
delivery. Thus, the Board needs to be fit for purpose, with the
right range of skill sets to be capable of tackling any issue that
comes through the boardroom door.
I had planned to introduce all the members of the Board.
Unfortunately, the ill wind that has blown out of Iceland during
the past week has had the effect of severely depleting the numbers
of directors here today. We have no fewer than five absentees who
despite their best efforts simply could not get to London: Sir CK
Chow, Nicky Oppenheimer, Mamphela Ramphele, Jack Thompson and Peter
Woicke.
Let me start by introducing the new faces who are being proposed
for election at today’s AGM. Furthest to my right is Ray
O'Rourke, who has spent a lifetime of achievement in large-scale,
complex construction projects. Ray has just joined the Safety and
Sustainable Development and the Audit Committees. Next to him is
Sir Philip Hampton, who has a wealth of financial, strategic and
boardroom experience. Philip is taking over the chairmanship of the
Remuneration Committee from Sir Rob Margetts. The third new person,
though absent today, is Jack Thompson, a lifelong successful mining
executive. Jack recently joined the Remuneration Committee and is a
member of the Safety and Sustainable Development Committee.
Next to Sir Philip is our senior independent director David
Challen, who chairs the Audit Committee… followed by Nick
Jordan our company secretary.
Moving to my left…. I don’t think Cynthia Carroll
our chief executive and René Médori our finance
director need any introduction.
We then have Chris Fay, who is stepping down after more than 10
years. Chris has chaired the Safety and Sustainability Committee of
the Board throughout that period and has been a member of the Audit
Committee for almost nine years. Chris will be succeeded as
chairman of the Safety and Sustainable Development Committee by
Peter Woicke.
On my far left is Sir Rob Margetts, who has been on the plc
Board since its inception, is also stepping down. For the past
decade, Rob has been an outstanding chairman of the Remuneration
Committee.
I would like to take this opportunity to thank Rob, Chris Fay
and Fred Phaswana (who resigned in January to take up an
appointment as chairman of Standard Bank in South Africa) for the
valuable contributions they have made over the years to the success
of Anglo American. I also sadly wish to pay tribute to Karel Van
Miert, who passed away in June. He is greatly missed by his
colleagues.
Finally, I would like to thank my predecessor, Sir Mark
Moody-Stuart. He achieved so much in his nearly seven years as
chairman to embed sustainability and sound corporate governance,
both in our own business and in the global arena.
On behalf of the Board, I wish all of those Board members
stepping down a long and active retirement. I also at this stage
wish to thank all our employees and pay tribute to their dedication
and their loyalty to Anglo American. I have been chairman now for
just under nine months, but have already travelled extensively
around the Group. I have been impressed not only by the quality of
our assets, but also by the professionalism of Anglo
American’s people. We have a top-class team, with an
unparalleled record of innovation and leadership in exploration, in
engineering, and in mining operations.
2009 review
We meet you, our shareholders, as a Board to provide you with
reports on the management and performance of your company during
2009. It was a year that began with the world economy in a very
moribund state, with world trade at a near-standstill, and metals
and minerals demand and prices severely depressed – but by
the end of the year commodities had staged a strong revival against
a background of increased optimism in the markets.
All of this stood us in good stead during an extremely volatile
year, with a particularly challenging first six months. Anglo
American delivered a very creditable overall performance as we
increasingly reaped the benefit from a series of strategic
initiatives designed to create greater long-term shareholder
value.
Our strategy
In 2009, we made further progress in positioning Anglo American
as a focused global mining company. Our strategy is to deploy
capital in those commodities we have identified as being the most
attractive to our Group in the long term, and on which we will
build Anglo American’s future. We have a portfolio of
high-quality assets in the most attractive commodity markets, with
a world-class range of expansions and projects, which are expected
to lift our organic output by about a third by 2013 – and
that excludes the very significant upside potential in our
unapproved project pipeline.
A key element of our strategy is our drive to unlock value and
reduce costs. Thus, the Board has given its strong support to
initiatives like our asset optimisation programme and a streamlined
supply chain, as well as the bold re-organisation of the Group.
This re-organisation is now substantially complete – and
includes, notably, the emergence of a new generation of younger
managers at the Executive Committee level. This has created a new
dynamic, with an operating model far more attuned to executing our
business strategy effectively.
Safety
No company can ever be ranked as truly great if it has an
unsatisfactory safety record. As your new chairman, I would like to
state categorically that safety will have my unremitting attention
as it has always been my main priority. My philosophy is that the
people who work for us should be able to return home safe to their
families each night.
It is encouraging to report that Anglo American is making and
continuing to make significant inroads in improving its safety
performance. In 2009, there was another sharp reduction in the
number of people who lost their lives on company business,
accompanied by a similar downward trend in lost-time injuries. In
the three years under Cynthia Carroll's leadership, the number of
fatalities has been reduced by nearly 55 per cent.
That is a remarkable achievement – and a striking riposte
to those many people both within and outside the industry who say
that deaths in mining are inevitable. Of course, we won’t be
satisfied until we reach our target of zero; but the fact that the
number of deaths and injuries has now reached record lows –
with further progress in 2010 to date – is starting to
convince our employees and contractors alike to believe that zero
harm is achievable.
Sustainable development
Operating our businesses in a socially and environmentally
responsible way, and earning and deserving trust, are fundamental
to our licence to operate and to delivering long-term value to our
investors.
Our commitment to excellence in this field is not a function of
the economic cycle. Indeed, in difficult economic times the
responsibility on us to demonstrate that we are a consistent,
supportive partner for sustainable development is all the
greater.
We continued to integrate sustainable development into our
business processes in 2009. We launched two major policies: the
Anglo Environment Way, and the Anglo Social Way, which establish
demanding environmental and social management standards. We
assessed our social performance against the standards in the Social
Way at the end of 2009, identifying many examples of best practice
but also some gaps which we aim to close in 2010.
We also launched a new version of our Good Citizenship Business
Principles – our corporate code of conduct. Alongside a
greater focus on environmental issues, this emphasises an increased
commitment to our already extensive programmes on HIV/AIDS
treatment as well as to diversity and family life.
The Principles also strengthen our stance against corruption,
and are complemented by an enhanced Business Integrity Policy,
accompanied by detailed anti-corruption Performance Standards.
These are all being rolled out throughout the business.
Climate change took centre stage at the end of 2009. Although
the Copenhagen Accord fell short of expectations, Anglo American
remains committed – as both a substantial consumer of energy
and a major coal producer – to minimise our own carbon
emissions. We also continue to play a proactive role in the ongoing
international debate, as well as developing our own technological
response.
In Australia, for example, we have helped develop two mine gas
power stations, based on methane captured from our coal mines.
Together, they will reduce greenhouse gas emissions by around 2.3
million tonnes a year.
More broadly, Anglo American continues to support leading
international initiatives to promote responsible corporate
activity. We remain committed to the United Nations Global Compact
as well as the Extractives Industry Transparency Initiative, which
is steadily gaining traction. We continue to support the Investment
Climate Facility for Africa, to which we have contributed $1.5
million to date. We are also actively engaged in discussions around
the review of the OECD Guidelines for Multinational Enterprises,
and we play an active role in support of the Voluntary Principles
on Security and Human Rights.
Outlook
Turning to the economic picture – the world economy is
recovering after the severe recession of late 2008 and the early
part of 2009. Unprecedented policy stimulus and, more recently, a
turn in the inventory cycle have contributed to the upturn. In the
major advanced economies there are some significant headwinds
remaining that will probably restrain growth in 2010 at least.
Financial systems are fragile, households and companies are
rebuilding balance sheets, and policymakers are under pressure to
withdraw extreme stimulus measures.
Prospects are much brighter in the major emerging economies.
China and India are growing strongly as increases in infrastructure
spending have offset the weakness in export markets. While
policymakers will probably seek to curb overheating risks,
longer-term economic fundamentals remain sound. Economic growth in
the emerging economies will continue to outpace that in the
advanced economies over the next decade.
Dividend
I believe the dividend is to the forefront in all of your
minds…. The resumption of the dividend at the earliest
possible time remains a key priority for the Board. Assuming that
the commodity price environment and outlook continue to improve and
the business performance remains robust, the Board would expect to
be able to announce the resumption of a dividend in respect of the
current financial year.
Conclusion
Anglo American is now a more fit for purpose organisation, and
we are enthusiastically executing our clearly defined strategy for
delivering value. With some of the highest-quality assets and
projects in the mining world, and the financing in place to deliver
on them, your company is well positioned to take optimum advantage
of the next commodity upcycle and beyond. I also have great
confidence in our highly professional management team, led by
Cynthia Carroll.
Pebble
Finally, to any visitors from Alaska… … Your
concerns involve a very early-stage project in which Anglo American
has an interest. I’m sure there will be questions that you
will wish to pose, but I would like to say now that, although I
have not yet had the chance personally to visit the project, I do
understand the concerns and interests that the Pebble project
arouses and appreciate the different points of view presented.
We have made it clear that the project will work on the basis of
world class scientific and engineering skills and that we will use
inclusive and innovative stakeholder engagement. Our bottom line
remains that, if the project cannot be designed in a way that
provides the proper protections for Alaska’s fisheries and
wildlife, or to the livelihoods of Alaskan communities, then it
shouldn’t be built. It is on that basis that we will continue
to evaluate the project in full compliance with the prescribed
regulatory processes in Alaska and the United States.
It is now my pleasure to give the floor to Cynthia, who will
provide you with further insight.
