Valterra Platinum Limited · JSE:VAL
Valterra Platinum — Anglo American Platinum — The Oxford Platinum Lectures 2020
25 slides from Valterra Platinum's conference presentation, 2020
Slide 1: The Oxford Platinum Lectures 2020: Primary PGM supply – will history repeat itself?
THE OXFORD PLATINUM LECTURES 2020 Primary PGM supply – will history repeat itself? 1 EXTERNAL
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American Platinum Limited (“Anglo American Platinum”) and comprises the written materials/slides for a presentation concerning Anglo American Platinum. By attending this presentation and/or reviewing the slides you agree t
Slide 3: Will history repeat itself?
WILL HISTORY REPEAT ITSELF? Are the palladium and rhodium price incentivising new production? • But, what is the right commodity price • Developing quality assets into sustainable demand We have seen this before and there is risk in trying to time the market • Damaged company balance sheets • Mine c
Slide 4: Pd and Rh price, incentivising new production?
PD AND RH PRICE, INCENTIVISING NEW PRODUCTION? SFA base case price forecasts (real 2020) 2017-2040 Platinum Palladium Rhodium, rhs USD/oz Pd prices > $1,000/oz between now and 2033 3 500 14 000 High Pd & Rh prices 3 000 12 000 potentially motivating restarts 2 500 10 000 2 000 8 000 Pt prices pick u
Slide 5: There is plenty resources and a flurry of activity
THERE IS PLENTY RESOURCES AND A FLURRY OF ACTIVITY Global PGM resources Probable / possible projects and mothballed mines / projects ~2.5 billion 4e ounces moz 5,5 4% Other Resource 81% 21% Russia Zimbabwe Approved and in 17% execution – 1.2moz pa by 2025 & 2.1moz by 2035 59% South Africa Year 2035
Slide 6: But we have seen this before
BUT WE HAVE SEEN THIS BEFORE SA PGM industry expansion windows: 4E basket prices - Rand vs. US dollar Everest, Mototolo, 2020 money terms (Price index 1972=100) Two Rivers, Twickenham 1000 Rand window (ZAR index > USD index) Dollar price Rand price 900 800 700 Northam, NAP, PPL, Barplats, Kennedy's
Slide 7: Growth expectations did not materialise
GROWTH EXPECTATIONS DID NOT MATERIALISE Projects (1999 to 2009) Primary PGM production 3e moz 14,3 13,9 13,1 Projects announced Production 2010 2000 2005 1 Category 2010 – 39 projects announced – 11 are producing in 2010 – 3e production expected – 3e production delivered ~10.6 moz pa ~1.2 moz 7 Sour
Slide 8: There is risk in trying to time the market
THERE IS RISK IN TRYING TO TIME THE MARKET PGM demand, supply & industrial balance PGM prices (2008 to 2012) (2008 to 2012) $/oz $1 210 / $1 008 / -20% 125 3e 3e 110 109 191 100 100 100 2008 2009 2010 2011 2012 Movement in stock 16 1 Jan 2-Jan-08 02-Jan-09 02-Jan-10 02-Jan-11 02-Jan-12 31 Dec 2008 2
Slide 9: Needed to address an industry in crisis
NEEDED TO ADDRESS AN INDUSTRY IN CRISIS 9 EXTERNAL
Slide 10: Constrained balance sheets and reduced capital expenditure to sustain future production
CONSTRAINED BALANCE SHEETS AND REDUCED OF CAPITAL EXPENDITURE TO SUSTAIN FUTURE PRODUCTION South African producer debt / (cash) (low & peak – 2011 to 2015) Rm 15000 12000 9000 6000 3000 0 Category 1 -3000 2011 2014 2011 2015 2011 2015 2011 2012 2011 2013 Company A Company B Company C Company D Compa
Slide 11: ~2.2moz of capacity placed on C&M, predominantly on the Western Limb
~2.2MOZ OF CAPACITY PLACED ON C&M, PREDOMINANTLY ON THE WESTERN LIMB PGM production capacity – closures 2009 to 2017 moz 2.2moz 0.1 0.3 0.7 1.9 1.4 Rhodium Palladium Platinum Western Limb Eastern Limb Northern Limb Restarted Capacity on C&M at present 11 Source: SFA Oxford EXTERNAL
Slide 12: Return of capital and return on capital
RETURN OF CAPITAL AND RETURN ON CAPITAL South African PGM miners have underperformed 4,00 7452,00 3,00 6452,00 2,00 5452,00 1,00 4452,00 % pa NA 0,00 3452,00 -1,00 2452,00 -2,00 1452,00 -3,00 452,00 02/01/2010 04/01/2011 06/01/2012 08/01/2013 10/01/2014 12/01/2015 02/01/2017 04/01/2018 06/01/2019 Di
Slide 13: Increasing demands for sustainable investment
INCREASING DEMANDS FOR SUSTAINABLE INVESTMENT United Nations Principles for Responsible Investment signatory growth 100 2 750 90 2 500 2 250 80 Assets under management (US$ trillion) 2 000 70 1 750 Nº Signatories 60 1 500 50 1 250 40 1 000 30 750 20 500 10 250 0 0 2006 2007 2008 2009 2010 2011 2012
Slide 14: Shareholders vs stakeholders
SHAREHOLDERS VS STAKEHOLDERS 14 EXTERNAL
Slide 15: COVID-19 will impact short-term supply
COVID-19 WILL IMPACT SHORT-TERM SUPPLY RUSSIA SOUTH AFRICA ~25% of primary supply ~55% of primary supply • Government enforced lockdown from • Government enforced lockdown from 28 March 2020 to 11 May 2020 26 March 2020 to 30 April 2020, mines and processing facilities placed on C&M • Nornickel cont
Slide 16: Primary supply likely to remain stable in the medium term, with disruption in the near term
PRIMARY SUPPLY LIKELY TO REMAIN STABLE IN THE MEDIUM TERM, WITH DISRUPTION IN THE NEAR TERM Primary PGM production 3e koz Current production outlook COVID-19 impact -6% Full impact of Covid-19 March & April shutdown and social Further losses, distancing protocols is dependent on severity & uncertain
Slide 17: Re-imagining mining to improve people's lives
RE-IMAGINING MINING TO IMPROVE PEOPLE’S LIVES Quality portfolio FutureSmart Mining™ Aligning suited to furthers people and future themes transformation processes Growing population & Technology-driven Operating model wealth efficiency efficiencies Urbanisation & Smaller energy & water Platform for e
Slide 18: Delivering on our sustainability commitments
DELIVERING ON OUR SUSTAINABILITY COMMITMENTS Ranked first out of 55 precious metals peers globally One of 325 global companies included in the index 18 EXTERNAL
Slide 19: Aligning people and processes
ALIGNING PEOPLE AND PROCESSES Double benching at Mogalakwena Rope shovel efficiency Modernisation at Amandelbult • From 2020 - pit slope design • Digitalisation improves control • Tumela 15E mechanisation based on double benching systems • Dishaba ramp-up • Moving from 30m to 60m stack • Improved ut
Slide 20: FutureSmart Mining – Technology & Digitalisation
FUTURESMART MININGTM – TECHNOLOGY & DIGITALISATION Concentrating the Mine™ Water-less Mine Modern Mine Bulk ore sorter Coarse particle rejection XLP at Tumela 15E • Sensors determine ore content • Rejection of coarse gangue • Extra-low profile mechanised prior to processing allowing ahead of the pri
Slide 21: Disciplined and value focussed capital allocation
DISCIPLINED AND VALUE FOCUSSED CAPITAL ALLOCATION Discretionary capital options Additional Portfolio Future project shareholder upgrade options returns 21 EXTERNAL
Slide 22: Project studies on value accretive growth options
PROJECT STUDIES ON VALUE ACCRETIVE GROWTH OPTIONS Mogalakwena expansion Der Brochen / Mototolo replacement and growth • Feasibility project study on track to complete in 2021, • Replacement of Mototolo in feasibility - maintain assessing: current production - Construction of third concentrator with
Slide 23: Mogalakwena – world class asset
MOGALAKWENA – WORLD CLASS ASSET • Doubling the area of Mogalakwena's mining right on the Northern Limb ‒ Acquisition of Kwanda North and Central Block prospecting rights on 27 August 2019 ‒ Prospecting rights incorporated into the Mogalakwena mining right ‒ Further exploration and evaluation work re
Slide 24: History will repeat itself
HISTORY WILL REPEAT ITSELF • The industry has been reshaped by previous crises, with most industry players having adapted • We are in the midst of another crisis and supply will be disrupted in the short-term • A sustainable PGM industry, requires miners to: – Proactively address Environmental, Soci
Slide 25: Thank you
THANK YOU 25 EXTERNAL
Anglo American Platinum — The Oxford Platinum Lectures 2020 on 6ix