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It has always been our policy in this Report to Society to focus on those companies in our portfolio in which
we have a majority shareholding and
a controlling interest.
By exception we report on issues of public concern which affect our independently managed subsidiaries and associates but recommend that the reader obtains a fuller account of these issues from the reports issued by those companies.
We announced in October 2005 that the Anglo American plc Group of companies would be undergoing a strategic realignment which would focus on mining as the Group’s core business.
Since then we have made significant progress in implementing this strategy. However, some elements are not yet complete and this has presented us with challenges in this report. To provide a transition for the reader we have, as far as possible, given a reflection of any performance indicators for the core businesses (those that will remain in the Group following this strategic realignment) and the Group totals.
The split of Kumba Resources into Exxaro and Kumba Iron Ore has been well documented. We report on Kumba Resources up to the transaction date. Thereafter, we report only on Kumba Iron Ore, in which we have a 64% shareholding. Exxaro will buy Namakwa Sands – we will report on it until the transaction is final. We will sell 26% of Black Mountain to Exxaro, but will retain the majority of the shares.
The dual listing of Mondi, our Paper and Packaging division, is scheduled to take place during 2007. The sale of Highveld Steel to Evraz has been approved by the European competition authorities and will be finalised when the South African approval is received. Both are included in this report.
Until March 2006, we held more than 50% of the shares in AngloGold Ashanti, but although we held the majority of the shares it was not fully reported as it was independently managed. We have reduced our shareholding to 42% and it is now an associate company, on which we will not report in future unless issues also have a material impact on Anglo American.
We do not report on our independently managed associate, De Beers, except in the annual financial statements. Our value-added numbers reflect managed subsidiaries and an equity-share of joint ventures in line with the International Financial Reporting Standards.
The Tongaat-Hulett group has not been reported in detail previously although we had a majority share, as it was independently managed. Tongaat-Hulett will be unbundled and Hulett Aluminium will be listed
on the Johannesburg Securities Exchange. A simultaneous broad-based black economic empowerment deal will reduce our interests in Tongaat-Hulett to 38% and in Hulett Aluminium to 39%, which means they will not, in future, be included in this report. During 2006, Hippo Valley, the Zimbabwean sugar estate, was sold. It is included until the date of the transaction but will not, in future, be reported on.
The core businesses are: Anglo Base Metals (excluding Namakwa Sands which will be sold to Exxaro), Anglo Industrial Minerals, Anglo Coal, Anglo Platinum, Anglo Ferrous Metals and Industries which includes Kumba Iron Ore but will exclude Highveld Steel, Hippo Valley and the Tongaat-Hulett group once those transactions are complete. We will report on joint ventures, such as Cerrejón in Colombia, when the issue is material. We also report on our exploration, technical and research functions as appropriate. From 2006, Copebrás data are reported under Anglo Base Metals and not under Anglo Industrial Minerals. Yang quarry in China will, in future, report under Anglo Coal.
Comparability of the data is affected by changes to the structure of the Group, by refinements in the methodology for determining certain data and improvements in data collection systems. The main changes during the year were the following:
- Eskom, the South African electricity utility, restated the factor it uses for calculating CO2 emissions relating to electricity purchased – affecting the Group total.
- Anglo Coal South Africa has captured CO2 emissions from explosives and spontaneous combustion for the first time.
- Our definition of noise-induced hearing loss will be revised during 2007 to improve consistency.
- HIV/AIDS reporting continues to evolve.
- Water remains a strategic and limited resource. Ongoing improvements in understanding our use of water, areas for reduction and recycling and pollution management continue to be targeted.
During 2006, in addition to focusing our assurance strategy on core businesses, we worked with KPMG to make progress towards a number of our future targets for assurance.
- A significant amount of preparatory work and an initial review have identified key areas of focus to enable us to begin reporting meaningfully on CO2 emissions from transport.
- We will be implementing a number of the findings from this review in 2007 to enable us to meet our commitment to the ICMM’s sustainable development framework, the UN Global Compact and the Voluntary Principles on Security and Human Rights.
- We have started to rationalise the data reported externally to further align our sustainable development strategy with core businesses. We will also be improving the accuracy and efficiency of managing key sustainability information.
In addition to its external assurance report (see Reporting and assuarance), KPMG provides Group management with a report summarising its findings and recommendations for improvement in these areas as well as those for which external assurance is given.
We are committed to reporting in accordance with the Global Reporting Initiative (GRI) guidelines and, with effect from the annual report for 2007, to reporting in accordance with the ICMM’s framework for sustainable development using the GRI’s Mining and Minerals Supplement.
Stakeholder engagement already plays a part in our activities. We elicit and receive feedback and views from a wide variety of opinion formers, employees, stakeholders, regional and national governments, NGOs, investors and socially responsible investment analysts.
The Five Capitals model of sustainable development is used as an organising framework for this Report to Society, as it is for our programme. The transformation of ores through extraction and processing into human, social, natural, financial and manmade capital is core to our belief that we can, and do, add value at many levels in the communities in which we operate.
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