ANGLO American would be “thrilled” to pay shareholders an interim special dividend especially as the company was “in a strong position and getting stronger by the day,” said Mark Cutifani, the group’s CEO.
“The most important conversation at the half year for the board will be about more returns to shareholders,” said Cutifani in response to questions at the Bank of America Global Metals and Mining conference today.
“I would think in the first instance we would likely go a special dividend,” he said adding, however, that the company wouldn’t abandon its 40% of free cash policy dividend. “We won’t suddenly go out and blow the money.”
Cutifani also said the company was “in [share] buyback territory”, but then he downplayed the likelihood of the group buying its own shares. “Considering we did buy-backs, given we’ve done the demerger [of Anglo Coal into Thungela Resources] we think a special would be certainly favoured by many. That’s the feedback we’ve had.”
“The nice thing is we’re obviously in a strong position, and it is getting stronger by the day,” he said. The company is exposed to the runaway copper and iron ore prices of 2021 whilst pricing for platinum group metals (PGMs) had also been exceptionally high.
In February, Anglo announced a final dividend of 72c/share, a 53% improvement year-on-year on the back of earnings before interest, tax, depreciation, and amortisation of $9.4bn for the year ended December, beating consensus by $400m.
Cutifani was asked about the political risks in Peru where the group hopes to commission its $5bn 300,000 tons a year Quellaveco copper mine by mid-year.
Pedro Castillo, the presidential candidate of Free Peru, which is contesting the election with Keiko Fujimori, the daughter of former leader and dictator Alberto Fujimori, has campaigned on extracting higher taxes from mining companies.
“We do have a financial stability agreement with the country over a number of years. We would expect that to be honoured in all cases. But we are certainly not getting an indication those sorts of things are going to be changed,” said Cutifani.
“You have still got a right-weighted congress, and its neck and neck between Fujimori and Castillo. We have got good relations on both sides. We’ve done all the right things to make sure we’ve got a successful project and that we will be treated fairly post-commissioning.”
Commenting on plans to quit its one-third stake in Colombia’s Cerrejon thermal coal mine, which Anglo shares with BHP and Glencore, Cutifani said the “… conversation [was] warming up pretty rapidly”.
“I would expect Cerrejon will be done in 18 months if not sooner.”