Monumentalist

Investment Analysis: ANGLO AMERICAN PLC (JSE: AGL)

Date: 10 January 2026 Analyst: Gemini (Senior Equity Analyst) Current Price: ~R685.70 JSE Ticker: AGL

Step 1: Data Gathering & Source Verification

Reporting Periods Used:

Interim Results: Half Year Financial Report for the six months ended 30 June 2025.
Annual Financial Statements: Integrated Annual Report for the year ended 31 December 2024.
Recent SENS: Review of announcements from Q3/Q4 2025 regarding the restructuring progress (Coal/Platinum divestments).

Source Documentation:

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R832 Billion | Large Cap (JSE Top 40). | | Dividend Yield (L12M) | ~1.7% | Based on 64 US cents total (Final 2024: 22c + Interim 2025: 42c). The yield is historically low as the company conserves cash for restructuring. | | Liquidity Check | High | AGL is one of the most traded counters on the JSE. Liquidity risk is negligible. | | P/E Ratio | N/A | Distorted/Negative. The group reported a loss attributable to shareholders for FY2024/25 largely due to massive impairments in the De Beers diamond business ($2.9bn write-down) and restructuring costs. A standard P/E is currently meaningless. | | NAV / Valuation | Sum-of-the-Parts | Valuation is currently driven by the "New Anglo" thesis (Copper + Iron Ore) vs. the "Old Anglo" discount (Diamonds + failed Coal sale). |

Step 3: Operational & Strategic Analysis

Business Overview (The "New" Anglo) Anglo American is in the final stages of the most aggressive restructuring in its history. The goal is to simplify into a pure-play energy transition materials giant, focusing almost exclusively on Copper (Peru/Chile) and Premium Iron Ore (South Africa/Brazil), supported by the Woodsmith Crop Nutrients project.

Divestments Status (Jan 2026):
Platinum: Completed. The demerger of Anglo American Platinum (now rebranded as Valterra Platinum) was finalized in June 2025.
Nickel: Sold to MMG.
Coal: Stalled. The sale of the steelmaking coal business to Peabody Energy hit a major roadblock in August 2025 when Peabody attempted to terminate. Anglo has re-initiated a sale process, creating uncertainty.
Diamonds (De Beers): Currently in a "dual-track" process (spin-off vs. trade sale) amid weak market conditions.

Performance Trend (Interim 2025 vs Prior)

Contracting but Stabilizing: Revenue is lower due to the removal of Platinum and Coal earnings.
Margins: Pro-forma EBITDA margins are resilient at ~43%, driven by strong Copper prices which are offsetting the drag from the remaining De Beers assets.
Cost Control: The group is on track with its $1.8bn cost-out program, which is critical to maintaining margins while the portfolio shrinks.

Sector Context: The Copper Supercycle vs. Execution Risk The SA Resources sector is currently bifurcated. PGM miners are struggling with low basket prices, but Copper is enjoying a structural bull market due to green energy demand and data center growth (AI infrastructure). Anglo is the JSE's primary proxy for this Copper boom, giving it a premium rating compared to pure PGM or Coal plays.

Step 4: The Verdict

Bull Case: The "Hidden" Copper Giant Once the clutter is gone, you are left with a world-class Copper business (Quellaveco & Collahuasi mines) trading at a discount to global peers like Freeport-McMoRan. If the De Beers separation is executed cleanly and the Coal assets are finally sold, the "conglomerate discount" vanishes, potentially unlocking 30%+ upside.

Bear Case: The "Messy Middle" The failure of the Peabody coal deal (Aug 2025) is a major red flag. It leaves Anglo holding dirty assets they explicitly promised to sell, potentially forcing them to accept a lower price. Additionally, if the Diamond market doesn't recover, spinning off De Beers becomes dilutive or impossible, leaving it as a dead weight on the balance sheet.

Fair Value Estimate R750.00 - R820.00 (Implied Sum-of-the-Parts value, assuming successful De Beers exit).

Final Rating: Speculative BUY Reasoning: The market is currently punishing AGL for the messy execution of the coal sale. However, the underlying Copper assets are the "crown jewels" of the mining world. Investors buying now are effectively betting that management will successfully finish the cleanup. If they do, the stock is cheap. If they fail, the stock is dead money.