Fitch changes Anglo American’s outlook to positive

Fitch Ratings has revised Anglo American’s outlook from stable to positive and affirmed the diversified mining group's long-term issuer default rating (IDR) at 'BBB'.
It said the change in outlook shows Anglo American's delivery on production growth and its continuing conservative financial profile.
“We view Anglo American as being better positioned than its peers for the global energy transition in the long term, due to improving operational diversification with a new copper mine starting operations in 2022 and a crop nutrients project in the pipeline for the medium term, plus a diversified existing commodity portfolio,” said Fitch.
“The rating is supported by strong cash flow generation over the medium term, due to a supportive commodity price environment, continued focus on operating improvements across the business and high volume growth relative to peers through a pipeline of greenfield and brownfield expansions in the coming years and new technologies.”
It also noted that market fundamentals for platinum group metals (PGMs), copper, iron ore and diamonds are favourable with demand growth being met by limited additional supply.
“Prices have shown continued upward momentum in the year to date, boosting earnings expectations and creating material financial flexibility,” said Fitch.
It said diamond price realisation for Anglo’s DeBeers is expected at $155 per carat in 2022 and $160/carat from 2023 to 2024.
The PGM basket prices were projected at $2,600 per ounce in 2022, $1,950 per ounce in 2023, and $1,750 per ounce in 2024.

Mathew Nyaungwa, Editor in Chief of the African Bureau, in Zimbabwe, Rough&Polished