Anglo American is a London-listed, multi-national mining business with operations around the world. Its share price closed at £17.68 on 13 December 2023 and its market capitalisation, calculated by multiplying the number of shares in circulation by the share price, stood at £27.3 billion.
Andrew Marsh at Artemis Income fund says: “Anglo American is the world’s largest producer of platinum. It also mines copper, diamonds, nickel and iron ore.
“The share price has fallen over 30% this year as a result of commodity price pressure and the slump in China, which is a big consumer of mining and metals. Who knows if that will reverse in 2024? But we do know the world needs to consume less fossil fuel. We need to electrify and that’s going to require more copper and other transition metals, growth in demand that’s core to Anglo American’s business.
“Only last year Anglo American began to produce copper from its new copper mine in Qeullaveco in Peru, which should deliver 300,000 tonnes of copper a year. It’s a modern operation and extremely efficient.
“Though I’m not saying Anglo American will get a premium for its output, we know that with new carbon footprint reporting coming in, companies are going to have to track carbon emissions right back to the production of the essential raw materials they use. This should work as an advantage to modern mining companies like Anglo American that are working hard to reduce their carbon emissions.
“We look for companies with sustainable and growing free cashflows that should result in a sustainable and growing dividend over the medium to long term. Anglo American fits that bill.”
Jamie Maddock at Quilter Cheviot, says: “The company is globally diversified and has attractive long-term output growth prospects underpinned by minerals and metals that are set to be key beneficiaries of the energy transition.
“After a challenging year featuring operational mis-steps and exceptional commodity price weakness for, in particular, platinum group metals, the shares have meaningfully underperformed leading to a low valuation and, against which, expectations that have been reset firmly lower.”
