Indaba: Mining must be ‘champion’ in fragmented world, Anglo’s Wanblad says

The global mining industry faces its most consequential moment in generations as critical minerals move to the centre of economic and security policy, Anglo American (LSE: AAL; JSE: AGL) CEO Duncan Wanblad told delegates at the Mining Indaba in Cape Town.

The annual convention started its 32^nd year on Monday as the Lagos-based Africa Finance Corp. argues in a new report that Africa must invest in processing to turn $8.6 trillion in undeveloped mineral wealth into steel, aluminium, fertilizers, batteries and alloys. Wanblad said geopolitical tensions, trade distortions and supply chain disruptions are reshaping the operating environment, but urged that mining must step forward as a force for human progress.

“We are navigating in a fragmented world,” he said. “Mineral supply is no longer just a commercial issue for mining companies. It is a commercial cornerstone of national competitiveness, security and now global stability.”

Century-old Anglo American, which controls major African operations including Kumba Iron Ore (JSE: KIO) and Anglo American Platinum (JSE: AMS), is positioning itself for a surge in copper demand forecast to rise about 50% by 2040, as it advances a merger with Canada’s Teck Resources (TSX: TECK.A; TSX: TECK.B; NYSE: TECK). It’s focused on creating a larger critical-minerals producer capable of developing the new copper supply needed for electrification, grid expansion and energy security.

Copper demand

“There is not a very long list of companies that have the wherewithal to develop 300,000-tonne copper mines, but we need every single one of them,” Wanblad said. The merger aims to create “a global critical minerals champion” to address supply-demand imbalances that can have “serious and sometimes unpredictable consequences” in a fractured geopolitical environment, he said.

China has announced plans to spend more than $570 billion to upgrade its national grid in the next five years, Wanblad said. Analysts estimate U.S.-listed utilities will need to spend $1.1 trillion over the same period to address grid bottlenecks, while data centres alone are expected to require roughly 14 million tonnes of copper between now and 2040, an additional 1 million tonnes of the red metal per year.

“If supply does not scale at the adequate rate, the world has a problem,” Wanblad said. “Collaboration is not optional. Collaboration is a structural imperative for this industry,” Wanblad said.

He cited the G20 critical minerals framework adopted in November in Johannesburg and the African Union’s Green Mineral Strategy approved last February as steps toward coordinated action. He pointed to the Lobito Corridor, a set of railways linking Africa’s copper belt in the Democratic Republic of Congo and Zambia with an Atlantic port in Angola, as “a powerful example of what partnership can achieve.”

Champion’s role

“The minerals of this continent must drive its own development just as much as they support the world,” he said, adding that being a “champion” means ensuring “that the wealth beneath the ground translates to opportunity above it, through jobs, skills and thriving economies.”

Anglo subsidiary Kumba Iron Ore, for its part, is converting mined land in the Northern Cape to cultivate pecans and pistachios using water from mine dewatering processes.

Once the Anglo-Teck merger completes, Wanblad said the combined company would contribute 600 million rand ($37.7 million) to South Africa’s junior mining Exploration Fund, which he described as “the lifeblood of mining.”

“As the chief executive of Anglo American and soon to be Anglo Teck, it is deeply important to me that we are so much more than a mining company,” he said. “A bigger, stronger Anglo American is not only good for our business, but it is good for South Africa and everywhere else that we operate.”

“Our world needs champions,” he said. “And our mining industry can and should be such a champion.”