Anglo American updates 2030 emissions target in inaugural transition plan
Anglo American has made a first attempt at setting out its transition strategy, ahead of a planned merger, but analysts criticise the mining giant's lower ambitions
The Quellaveco mine in Peru is a glimpse into what Anglo American’s transition might look like. The mine, that is now supplied entirely by renewable energy, produces an essential component of electrification – copper. Quellaveco has thus far delivered over a million tonnes of the red metal.
Anglo American has now launched its inaugural climate transition strategy, outlining its wider transition vision in a bid to bolster investor confidence. The plan also updates the company’s 2030 emissions reduction target to reflect a 2020 baseline.
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Transition mining
For Anglo American and the wider mining industry, the energy transition is a structural demand shift of significant proportions.
The average electric car, by IEA estimates, needs six times more mineral inputs than a conventional one. An onshore wind farm needs nine times more minerals than a gas plant. Solar panels and grid transmission need metals and minerals too.
Anglo’s three-year transition plan focuses on a product range spread across copper, iron ore, manganese and crop nutrients.
“Our aim is to reliably and responsibly provide metals and minerals that are required to decarbonise our planet and that are also the building blocks of modern life – from housing to food – for ever more people”, writes Duncan Wanblad, the company’s chief executive.
The company’s underlying 695kt copper capacity is currently bringing in nearly $4bn before taxes. Anglo’s intention is to double down on its copper range through mines in Chile and Peru at a cost of $750bn.
Premium iron ore, which steelmakers will need more of, is another Anglo American cornerstone product offering with capacity estimated at 60.8MT.
Interim ambition
The mining sector’s interim operational emissions have come under investor scrutiny. In October last year the Global Investor Commission on Mining 2030 released recommendations outlining what investors expect.
“The market is at an inflection point”, Adam Matthews, chief responsible investment officer for Church of England Pensions Board noted at the time.
“We can choose to support a vision of responsible mining that addresses the industry’s systemic challenges which in turn would enable long term value generation. Or we can allow the digital and clean energy system of tomorrow to be born of social discord and environmental breaches”, added Matthews, who also chairs the commission.
Anglo’s transition plan sets the 2030 ambition to 30% reduction against a 2020 baseline. A move the company says was guided by best practice.
“We sought to select a baseline year that best captured the current phase of our non-linear journey to decarbonise our operations”, the report reads.
Miheka Patel, mining lead at research provider Accela Research says alignment with investor demand for credible ambition is a point of concern.
“Anglo’s new plan lowers transition risk, but it also lowers ambition. With an emissions footprint now 85% smaller, a reset was expected. What’s disappointing is how much easier the 2030 target has become”, says Patel.
“The company was halfway there, now it has just 4% left. Planned renewables at Sishen and Kolomela alone should get it over the line”, she explains.
Anglo Teck
Anglo American’s transition plan is set against the backdrop of its on-going merger with Teck Resources. The transition plan will be updated once the new entity – Anglo Teck Plc – is set up.
Simon Graham, an analyst at Accela Research says transition alignment between the two is largely an unanswered question.
“We’re treating this plan cautiously. If the Teck merger goes through midway, there’s a strong chance the targets and strategy will be reset again. The two companies have different climate frameworks, and it’s still unclear how they’ll align them”, Graham told Net Zero Investor.
“Anglo is already at 89% renewables, and Teck has targeted net zero scope 2. That means diesel will soon dominate operational emissions. Yet large-scale fleet electrification isn’t expected until the mid-2030s, which feels slow”, adds Patel.
In its report, Anglo American acknowledges its 2030 target is not Paris aligned and frames SBTi accreditation as unfeasible, citing a missing SBTi pathway for diversified mining. Its 2040 carbon neutrality vision, the company says, is Paris aligned.
Graham sees that goal within reach, particularly if offsetting is part of the calculus. Integrating renewables and replacing diesel haulage will likely determine its delivery.
“The real test is replacing diesel. And it’s worth noting the target doesn’t cover the full portfolio, it excludes Kumba, which remains a major source of emissions but will reach its end-of-life in the 2040s”, Graham notes.
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