Johannesburg - Demand for the key metals and minerals produced by Anglo American will remain strong through to at least 2017 and the group intends increasing its production of them significantly over the next three to five years.
That was the bullish message given by CEO Cynthia Carroll to analysts and financial media at today's briefing in London on the group's interim results.
Carroll said world demand for copper was expected to rise at a compound annual growth rate (CAGR) of 4% from 18Mt in 2007 to 27Mt by 2017.
She also expected CAGR rates of 4% over this period for platinum and exported metallurgical coal.
Anglo forecast that world demand for platinum will rise from 8Moz last year to 12Moz in 2017 while it expected demand for metallurgical coal to increase from 220Mt to 325Mt over the same period.
The greatest increase in demand was expected for seaborne traded iron ore which was forecast to grow at a 7% CAGR from 772Mt in 2007 to 1 512Mt in 2017.
Carroll said that attempts by the mining groups to increase supply to meet this demand were being constrained by a number of factors.
These included: an increasing scarcity of basic commodities such as energy, skilled labour, water and infrastructure; long lead-times for the delivery of mining equipment; regular disruptions to supply from factors like weather, earthquakes and labour disputes and prolonged permitting processes for new projects.
Anglo is currently spending US$700m annually on heavy mining equipment and, to deliver on its current project pipeline to the end of 2010, the group needs to buy 250 new large trucks, 120 track dozers, 50 shovels, 50 drills and 35 wheel loaders.
Carroll said that, despite these constraints, Anglo would double its output of copper over the next five years from the 2007 level of 666,000t and achieve a CAGR of 9% in its production of the metal from 2008 to 2016.
She expected Anglo's production of nickel and metallurgical coal to double over the next three years. Anglo produced 45 000t of nickel in 2007 and forecast a CAGR of 22% for its output of the metal between 2008 and 2016.
The group produced 11.3Mt of metallurgical coal last year and expected to achieve a 10.2% CAGR for the product during the period 2008 to 2016.
She also predicted Anglo would grow its iron ore production five times over the next five years from the 2007 production level of 32.4Mt and achieve an 18.6% CAGR over the period 2008 to 2016.
"Market share gains in all our major businesses will come from our production growth plans," said Carroll.
The bulk of the growth will be sourced from South America where some two-thirds of the $30bn allocated for capital projects not yet approved by the Anglo board is destined to be spent.
The major commodity on which the money will be spent is copper with ferrous metals - which includes iron ore - in second position.
Carroll stressed the role of China as the driver of world demand growth for copper, nickel, platinum and iron ore. These are the metals on which China is the most dependent for imports.
China accounted for 26% of world demand for copper in 2007 and this is expected to rise to 55% by 2017.
China imported 49% of the world's seaborne traded iron ore last year and that is expected to rise to 65% by 2017 while the country consumed 16% of the world's platinum production last year and that is forecast to rise to 29% by 2017.
"There were 9m cars on the road in China last year but these numbers will double in ten years," Carroll predicted.
Carroll highlighted Anglo's "unique position in platinum" as one of the group's strengths on which she intended capitalising.
Anglo spent another US$600m "creeping up" its stake in Anglo Platinum (AngloPlat) in which it now holds a 78% equity stake.
Asked whether Anglo intended taking out the remaining minorities and then delisting AngloPlat Carroll replied, "We always have that option. We will continue to look at it as the share price moves."
Comment from one analyst was that Anglo seemed to have given preference to purchasing AngloPlat shares over its own share buy-back programme on which it spent only $300m in the six months to end-June.
- MiningMX.com
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