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Anglo American PLC AAL

Rating as of

Morningstar’s Analysis

Valuation
Currency in GBX
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Anglo American Tracking Well Operationally but Bull Market for Commodities Sees Shares Overvalued

Analyst Note

| Mathew Hodge, CFA |

In keeping with the trend of diversified miners exiting coal, Anglo American plans to demerge its South African thermal coal operations into a new Johannesburg Stock Exchange listed vehicle, Thungela Resources. We think the demerger is a reasonable move allowing investors to choose based on their own views of carbon. However, we do not expect to change our fair value estimate once demerged. From a free cash flow and investment point of view, we see no impact to Anglo as the underlying future cash flows are unchanged, just housed in different vehicles. Coal earnings are also low and immaterial to our forecast, and the spin-off is being carried out at no debt with modest net cash.

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Company Profile

Business Description

Anglo American's mining portfolio spans many commodities and continents. Like fellow large diversified miners, Anglo has significant exposure to copper, coal, and iron ore, but it is unique in its significant platinum output. The company accounts for about one third of the world’s platinum supply and just over 20% of palladium supply. Anglo also owns 85% of De Beers, in most years the world's largest supplier and marketer of rough gem diamonds.

Contact
20 Carlton House Terrace
London, SW1Y 5AN, United Kingdom
T +44 2079688888
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 64,000

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