Creating Value with the Future in Mind - Anglo American South Africa

creating value for society creating value for host countries
creating value for
host countries
the issue
The changing
expectations of national
governments and
local communities
about how the
economic benefits
generated by mining
should be shared.
Total value distributed
by Anglo American in 2012
$29,558 m
Percentage of our
employee, tax and
supplier expenditure in
developing countries
80%
Our economic value added
Mining is a key driver of economic
growth and can enable people to
transform their lives in a positive way.
As an industry that extracts a nonrenewable
resource, we have a duty to
be especially vigilant in ensuring that
we mine responsibly, engender trust
and deliver a fair share of the benefits,
during the lifetime of our operations,
to host governments and communities,
leaving them with a firm foundation
for a sustainable future. Most of our
operations are located in emerging
economies, many of which have
low levels of socio-economic
development. As a major global
mining company, this raises particular
expectations. To ensure a lasting
positive legacy, we supplement the
value generated through our core
activities, with initiatives designed to
develop host communities in the long
term, including investments in health
facilities, jobs, skills and infrastructure.
It is through our core business
activities – employing people, paying
taxes to governments and procuring
from host communities and countries –
that we make our most significant
positive contribution to national and
local economies.
The value distributed directly by
Anglo American in 2012 amounted to
$29,558 million. This figure includes:
••
$14,861 million paid to suppliers
••
$4,776 million to our employees
through wages and related
expenditure
••
$3,568 million in taxes and royalties
to governments
••
$2,236 million paid to Anglo
American and outside shareholders
••
$705 million to providers of capital
••
$3,412 million that was reinvested
in the Group.
Approximately 80% of our total
supplier, employee and tax
expenditure was in developing
countries. Through the multiplier
effect, the positive economic
contribution of our operations extends
significantly further than these direct
forms of value distribution.
Further details on the nature of our
economic value added are provided
in our Annual Report.
There is a need
to balance the
risks and
rewards of
responsible
investment
and the
development of
non-renewable
resources.
APPROACH TO TAXATION
We understand that tax revenues
generated from our activities form
an important element of our economic
contribution to the communities
and countries in which we operate.
This is reflected in our approach to
our tax affairs and is framed by our tax
strategy, our support for the principles
of transparency and the nature of
our approach to engagement with
stakeholders. We are keen to engage
constructively with governments and
other policymakers on issues such
as transparency or the design of
taxation regimes.
The mining industry operates in an
increasingly financially constrained
world, where there is not the capacity
to invest in all financially viable projects
at any one time. Decisions to invest in,
develop or expand operations must
be considered on their merits and are
not made lightly. Mining is a high-risk,
long-term business and new projects
being developed today are typically
highly capital-intensive with relatively
long lead times before returns are
generated once mines go into
production. The capital investment
and commitment we make to host
countries reflect that.
Economic value distribution
$ million
Suppliers 14,861
Employees 4,776
Company taxes 3,568
Reinvested in the
Group (capex) 3,412
Dividends 2,236
Provision of capital (interest) 705
Total 29,558
Includes De Beers data from date of acquisition
at the end of August 2012.
26 Anglo American plc Sustainable Development Report 2012