After nine years in the hot seat, Mark Cutifani has stepped down as the CEO of Anglo American. To mark the occasion, the company released the full transcript of the prepared remarks at the AGM. I felt it would be worthwhile to touch on some of the key points discussed.

As a starting point, it’s worth highlighting that the meeting took place in person. After two years of COVID-related restrictions forcing companies to have online meetings, there seems to be significant demand for in-person meetings. I believe this is in line with a hybrid working culture in general, with critical meetings held face-to-face and the rest taking place online.

COVID isn’t entirely over yet, of course. The first quarter of 2022 saw Anglo operating at 95% capacity due to heightened employee absenteeism from the outbreak of Omicron. The company expects to operate at 100% capacity in the second quarter.

Mining companies are (quite rightly) focused on the safety and wellbeing of employees, as mining is still a dangerous business and fatalities are common. Anglo American achieved its best-ever safety performance in 2021 but there was still loss of life, so there will always be more work to do. With a 93% reduction in fatalities since 2013, a great deal has already been achieved under Cutifani’s leadership.

Unsurprisingly, climate change was second on the list for the Chairman’s address. Anglo’s goals are to reduce Scope 1 and Scope 2 GHG emissions by 30% (measured in 2030 vs. a 2016 baseline) and to be carbon neutral across operations by 2040, with reduction of Scope 3 emissions by 50%. This is a substantial area of investment for all mining groups.

In positioning the business for the future, the portfolio is being tilted towards the metals and minerals that benefit from a lower carbon economy. This includes copper, platinum group metals (PGMs) and crop nutrients.

For example, Quellaveco (a copper mine in Peru) is Anglo American’s largest current project, expected to add 10% to group production. It is on schedule and on budget, expected to be commissioned this year. The Woodsmith fertiliser project in the UK is in progress. Anglo has completed its exit from thermal coal mining operations, for which Thungela shareholders who have banked huge returns are truly thankful.

Cutifani is leaving on a high note, with a record financial performance boasting underlying EBITDA of USD20.6 billion and attributable free cash flow of USD7.8 billion. Efficiency gains in the platinum, De Beers and Kumba Iron Ore operations contributed to a 5% volume increase, which helped drive a substantial improvement in EBITDA margin.

Return on capital employed was 43%, a great reminder of how profitable mining companies are at the right point in the cycle. The goal is a 15% through-the-cycle return, supported by Anglo making excellent progress on the cost curve over the past nine years.

The balance sheet is strong, with net debt of USD3.8 billion at the end of 2021. This is just 0.2x underlying EBITDA, which is a low level of gearing.

Duncan Wanblad is the incoming CEO, bringing 30 years of international mining experience with him. He has big shoes to fill.