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Anglo Pacific holds dividend and clears decks for battery metals switch

Royalty income was affected by a reduction in production from its largest coal investment,

Anglo Pacific Group PLC -
Greener investments are the future for Anglo Pacific

Anglo Pacific PLC (LON:APF) held its dividend in 2020 and said the outlook for most commodities looks favourable for the near-term as governments globally increase investment in response to Coronavirus (COVID-19).

The mining royalty specialist is switching its focus away from coal and towards battery and base metals and recently completed its largest-ever deal with the acquisition of a royalty stream from Canadian cobalt mine Voisey Bay for US$205mln.

Royalty income in the year to end-December 2020 was affected by a reduction in production from its largest coal investment, Kestrel in Australia, and dropped to £34mln from £55.7mln.

Anglo Pacific also wrote down the value of its investment in Kestrel by £44mln, which along with £3.4mln for other impairments meant a loss for the year of £27.2mln (2019: £37.6mln profit).

Julian Treger, chief executive, said Anglo Pacific is a ‘very different’ business from a year ago.

Voisey Bay has “fundamentally repositioned our portfolio towards materials vital in providing cleaner energy for the future whilst ensuring that the group replaces its Kestrel revenue ahead of time”, he said.

This is immediately evident on our balance sheet where these materials now account for over 60% of our royalty and streaming assets.

Operationally our portfolio has performed well during the year considering the challenges presented to the industry by COVID-19, demonstrating the quality of the investment projects.

“The reduction in our royalty revenue during 2020 to £34.0m however, highlighted how important it was to act decisively to reduce our dependence on one single asset and commodity.

“The coal markets, coking coal in particular, had a turbulent year caused in large part by the closure of Indian ports and the knock-on impact of an oversupplied seaborne market

“Our clear ambition is to reduce our coal exposure over the coming years through the acquisition of additional royalties and streams focussed on greener materials.”

The dividend for the year is 9p, unchanged from a year earlier.

Quick facts: Anglo Pacific Group PLC


Price: 123.6 GBX

Market Cap: £264.23 m

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