Anglo American (LSE:AAL) has seen its ordinary Dividend shrink sharply, leaving income investors looking towards a very large one-off payment tied to its Merger with Teck. That payment now depends on the last regulatory hurdle, in Beijing, where the FTSE 100 miner is reported to be facing demands over copper supply. The result is an unusual income story in which the regular dividend and the special payment point in different directions.

A dividend under pressure

As of 7 October 2026, Anglo American's annual dividend is 17.0p per share and its latest payment is 16.9p. The two figures being so close shows how little was paid in the other instalment of the year. The trailing 12-month Yield and the indicated yield are both just 0.7%, an unusually low return for a major miner.

The year-on-year change is a fall of 69.2%, a steep cut that comes as the group works through a major restructuring of its portfolio. Anglo has paid dividends for nine consecutive years, a shorter record than many peers, and its continuous growth count is zero. Mining dividends tend to follow Commodity cycles, so a record of payment without a record of growth is common in the sector, but a cut of this scale underlines how quickly the figure can change.

For readers new to the measure, the indicated yield annualises the most recent payment rate and divides it by the current share price, while the trailing yield adds up what was actually paid over the past twelve months. When a company cuts its payout, the trailing figure can overstate or understate what a new buyer would receive, which is one reason both measures are shown here and why neither should be read in isolation.

Interpreting the negative ratio

The trailing Payout Ratio is minus 15.2%. A payout ratio normally divides the dividend by earnings per share, so a negative figure indicates a loss per share over the period while dividends were still being paid. The ratio therefore does not provide a meaningful guide to earnings cover. Anglo is also in the midst of portfolio change, including its planned exit from De Beers, which complicates any comparison with earlier years.

The practical conclusion is that the conventional numbers offer limited insight into the company's capacity to pay at present. Investors would be better served by looking at underlying earnings and Cash Flow once the portfolio has settled, and at the dividend policy the enlarged group adopts. Miners often set payouts as a share of underlying earnings rather than reported profit, which strips out one-off charges and asset write-downs and gives a steadier base.

The Teck special dividend

The more important figure for shareholders sits outside the trailing yield. Under the terms of the combination, Anglo must declare a Special Dividend of about US$4.5bn on its ordinary shares, which is a condition of completing the merger. A Teck filing dated 1 September showed that the deadline for paying it was extended to 45 days after the merger takes effect, from 30 days previously. The per-share amount should be checked against company documents once it is confirmed, since it depends on the number of shares in issue at the time.

Timing therefore hinges on regulators. In its third-quarter production report on 20 October, Anglo said China's antitrust authority was the last outstanding regulatory milestone, that it was engaging constructively, and that it continued to expect completion by March 2027. It was reported on 2 October that the regulator had asked Anglo to commit to a steady Supply of copper concentrate to China as a condition of approval. Neither the outcome nor the terms are known.

A special dividend differs from the ordinary payment in an important way. It is a single distribution linked to a particular transaction, not a signal of what the company will pay each year, so it should not be annualised or added to the regular yield when judging recurring income.

Output dips, guidance holds

The same report showed copper production down 5% year on year in the third quarter to 174,900 tonnes, mainly because of extreme weather in Chile and the processing of lower-grade stockpiles at Collahuasi. Premium iron ore output fell 4% to 13.8m tonnes, largely because of work at Kumba. Diamond output declined 11% to 6.8m carats, although guidance for the year was raised to between 25m and 28m carats. Anglo left its copper guidance unchanged at 700,000 to 760,000 tonnes and its premium iron ore guidance at 55m to 59m tonnes.

Volumes matter for the dividend because miners earn cash from the tonnes they sell multiplied by the price, less the cost of production. A quarter of weaker copper output does not by itself change the payout outlook if guidance for the full year is intact, but repeated misses would reduce the cash available for the combined group once the merger completes. Cost control and the grade of ore being processed are the other variables that shape how much of each tonne's value reaches shareholders.

What to watch

The first thing to look for is a decision from China and any conditions attached to it, because the timing of the special dividend flows directly from completion of the merger. Investors will also want to see progress on the De Beers exit, confirmation of the per-share amount of the special payment and the dividend policy of the combined company, which will determine whether the very low ordinary yield at LSE:AAL is a temporary state or a new starting point.

Beyond those milestones, the delivery of copper guidance through the fourth quarter will show whether operational problems in Chile were short-lived. Anglo American (LSE:AAL) is repositioning itself around copper, and the dividend that eventually emerges from that shift, including how the board balances regular payments against reinvestment in growth projects, will reflect both the metal's price and the group's ability to produce it reliably and at sensible cost.