Anglo American plc · LSE:AAL
Anglo American — Investor Day (October 2009)
38 slides from Anglo American's investor day presentation, Oct 6, 2009
Slide 1: Analyst Visit October 2009
Analyst Visit October 2009 • Day 1: Barro Alto Project • Day 2: Minas Rio Presentation • Day 3: Los Bronces Project 0
Slide 2: Cautionary statement
Cautionary statement Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: Anglo Base Metals: Barro Alto Project
Anglo Base Metals: Barro Alto Project Shaping our Nickel Portfolio Brian Beamish Chief Executive, Anglo Base Walter De Simoni Head of Nickel Euler Piantino Barro Alto Project Manager 6th October 2009
Slide 4: Agenda and Site Visit Itinerary
Brian Beamish, CEO Anglo Base 1. Introduction to Anglo Base Metals Walter De Simoni, Head of Nickel 2. Nickel Market Overview Walter De Simoni, Head of Nickel 3. Nickel Business Overview Euler Piantino, Barro Alto Project Manager 4. Barro Alto Project Delivery Questions and Answers Site Visit Itiner
Slide 5: Safety First: Our Number One Priority
Safety First: Our Number 1 Priority Base Metals Safety Performance* Safety Statistics 7 0.7 • Safe production is our top priority 6 0.6 • Vision to achieve Zero Harm through effective management of safety in all managed 5 0.5 operations and projects Fatalities 4 0.4 • Safety Improvement Plan impleme
Slide 6: Base Metals and One Anglo
Base Metals and One Anglo Base Metals – an integrated strategic framework A leading contributor to the Anglo portfolio Large, long-life, expandable, An integrated strategy leveraging Anglo’s Technical, Safety, Asset low cost operations Optimisation and Procurement initiatives to drive significant sh
Slide 7: Base Metals Strategy
Base Metals Strategy Focus on large, long life, expandable, low cost operations, weighted towards the more structurally attractive commodities • Since 1999, significant reshaping of the portfolio has taken place – Divestment of smaller, higher-cost EBITDA Margin operations e.g. KCM, BCL, Bindura, Ta
Slide 8: Management Team
Management Team • Decentralised structure • Depth of management Brian Beamish CEO Duncan Walter De John Allen Ramsay Peter Whitcutt Greg Ruthven Business Dave Morris Graham Brown Wanblad Simoni Mackenzie Head of CFO HR Development Head S&SD Exploration Head of Copper Head of Nickel Head of Zinc Tech
Slide 9: Geographical Footprint
Geographical Footprint Copper Nickel, Phosphates, Niobium Zinc 8 Rep of 1 Ireland 6 Venezuela 2 1 Alaska 2 3 7 4 6 95 Brazil Chile 5 42 3 Namibia Operations 2008 Prod 1 Collahuasi (44%) 1 South 204kt 34 Africa 2 Mantos Blancos 88kt 3 Mantoverde 63kt 4 El Soldado 50kt Operations 2008 Prod 5 Los Bronc
Slide 10: Financial Profile
Financial Profile Operating Profit by Commodity* (US$M) • Anglo Base Metals is a significant profit contributor within Anglo, averaging over one 3,019 2,983 third of operating profit in the last 3½ years 2,017 Anglo Base Metals contribution to Group’s Operating Profit (% of total Operating Profit) 6
Slide 11: Agenda and Site Visit Itinerary
Brian Beamish, CEO Anglo Base 1. Introduction to Anglo Base Metals Walter De Simoni, Head of Nickel 2. Nickel Market Overview Walter De Simoni, Head of Nickel 3. Nickel Business Overview Euler Piantino, Barro Alto Project Manager 4. Barro Alto Project Delivery Questions and Answers Site Visit Itiner
Slide 12: Nickel Demand Outlook
Nickel Demand Outlook The nickel market is forecast to benefit from strong demand fundamentals over the medium to long-term – though demand will follow the pronounced stainless steel cycle Primary Nickel Consumption • Nickel demand has been affected by 2,500 2008–2020F price-led substitution, de-sto
Slide 13: Nickel Supply Outlook
Nickel Supply Outlook Shortage of economic sulphide deposits means new capacity will largely be sourced from laterite resources, which are extremely abundant, but have technical challenges Global Nickel Mine Production • Unprecedented high prices in 2007 saw (Excludes ‘possible’ projects) 2,500 many
Slide 14: Nickel Markets: Our View
Nickel Markets: Our View Market recovery may be affected by overhang of inventory but in the long term there is a requirement for considerable new mine/smelter capacity Nickel Supply Demand Outlook • Longer-term robust demand growth will 2,500 520kt of new mine supply require additional new capacity
Slide 15: Agenda and Site Visit Itinerary
Brian Beamish, CEO Anglo Base 1. Introduction to Anglo Base Metals Walter De Simoni, Head of Nickel 2. Nickel Market Overview Walter De Simoni, Head of Nickel 3. Nickel Business Overview Euler Piantino, Barro Alto Project Manager 4. Barro Alto Project Delivery Questions and Answers Site Visit Itiner
Slide 16: Nickel Strategy
Nickel Strategy Delivering on the strategy • Nickel continues to be an attractive industry – Long term outlook is positive – Limited sources of new supply with proven, economic processing technology – Attractive historical industry returns • Anglo’s strategy is to invest in large, long life, expanda
Slide 17: Current Portfolio
Current Portfolio Loma de Níquel Nickel • Developed by Anglo from 1997 to 2000 1 • FeNi laterite mine and smelter in Venezuela Venezuela • Production 10.9kt Ni in 2008 (capacity 17kt) • Political environment remains challenging 5 Codemin Brazil • FeNi laterite mine and smelter in Brazil, processing
Slide 18: Nickel Positioning
Nickel Positioning • Barro Alto to improve Anglo American’s 2015 Cost Curve cost positioning in nickel considerably – The project’s cash costs expected to 8 be in the middle of the cost curve 6 – Cost position expected to improve with asset optimisation efforts going $/lb ($2009 real) Barro forward
Slide 19: Nickel Reserves & Resources
Nickel Reserves & Resources • Significant resources from Barro Alto Attributable Reserves & Resources – Approved life of mine to cover 25+ Barro Alto Reserves years feeding both Codemin and the new plant Resources – Further upside potential from resources Reserves Codemin • Codemin and Loma de Níque
Slide 20: Nickel in Anglo Base Metals Portfolio
Nickel in Anglo Base Metals Portfolio Potential to become a meaningful nickel producer • Two nickel operations Anglo Base Metals Nickel Production (ktpa) 160 – Loma de Níquel with 17ktpa capacity 140 – Codemin with 10ktpa capacity 120 • Barro Alto to increase nickel production 100 significantly (36k
Slide 21: Anglo American Expertise
Anglo American Expertise Anglo American’s team in Brazil has been involved with ferronickel operations and projects since the early 1960’s • Vast experience with Rotary Kiln – Electric Furnace technology • Morro do Níquel, Codemin, Loma de Níquel and now Barro Alto all developed by Anglo and have th
Slide 22: Agenda and Site Visit Itinerary
Brian Beamish, CEO Anglo Base 1. Introduction to Anglo Base Metals Walter De Simoni, Head of Nickel 2. Nickel Market Overview Walter De Simoni, Head of Nickel 3. Nickel Business Overview Euler Piantino, Barro Alto Project Manager 4. Barro Alto Project Delivery Questions and Answers Site Visit Itiner
Slide 23: What it takes to deliver a project
What it takes to deliver a project Four key principles underpin project delivery in Anglo Base Metals, supported by the "Anglo Projects Way" Safety as the barometer of project implementation excellence 1 Safe Delivery – – Group safety standards applied since project inception Exceptional safety perf
Slide 24: Project Overview (1/5)
Project Overview (1/5) Location Barro Alto, Brazil Mineral Resources 123Mt @ 1.5%Ni Laterite / saprolite ore, highly weathered material, high moisture Ore Characteristics content Mining Method Open pit mining Processing Technology Standard Rotary Kiln – Electric Furnace Life Of Mine 26 years Start-U
Slide 25: Project Overview (2/5)
Project Overview (2/5) Barro Alto Location Project History • 1960’s deposit discovered Barro Alto Codemin • 1970: exploration started Project Distances from Barro Alto Brasilia Goiania Codemin 150 km • 1988: AA options the deposit from Inco, first Brasília 170 km Belo Horizonte Anápolis 200 km Feasi
Slide 26: Project Overview (3/5)
Project Overview (3/5) Geology Technology • Processing technology is well proven Rotary Kiln – Electric Furnace route • Project design includes two 185m rotary kilns and two 6-in-line rectangular 83MW electrical furnaces • Process is very energy intensive • Efficient handling of dust is a key issue
Slide 27: Project Overview (4/5)
Project Overview (4/5) Process Flow 26 26
Slide 28: Project Overview (5/5)
Project Overview (5/5) Project Facts Operating Facts • Mineral rights 100% owned by Anglo • 2.4 million tonnes of dry ore treated at the American plant per annum • Required licenses and servitude areas in • 36k tonnes of Ni in FeNi produced on place according to schedule average over 26 year LOM • A
Slide 29: Project Performance – Safe Delivery
Project Performance – Safe Delivery Exceptional safety performance at Barro Alto: 8.2 million hours LTI-free • Exceptional project safety performance to Total LTIFR project to date: 0.036 date 2 0.5 – 3 LTIs and no fatalities since start of development (over 14.9 million man hours 0.4 to end Aug) Fa
Slide 30: Project Performance – Sustainable Development
Project Performance – Sustainable Development Rigorous environmental standards have been applied that comply with Brazilian, World Bank and Anglo American standards • Required licenses and permits are in place according to the schedule • Plant and mine environmental management programs address energ
Slide 31: Project Performance – Capital Discipline (1/2)
Project Performance – Capital Discipline (1/2) Capital intensity is below industry benchmarks Capital Intensity1 of Nickel Projects • Resulting capital intensity of USD22.7/lb (US$/lb Ni) remains amongst the lowest in the industry Onca Puma 20.4 • Nickel projects present capital intensities as (Vale
Slide 32: Project Performance – Capital Discipline (2/2)
Project Performance – Capital Discipline (2/2) Forecast capital cost $1.8Bn Contingency Spend by Category 4% • Total spend to date $1,055M Indirect 9% Engineering 8% Procurement • 2009 YTD spend $318M 42% • Remaining 2009 spend $230M Construction • 2010 forecast spend $463M 37% • 2011 forecast spend
Slide 33: Project Performance – Project Execution (1/2)
Project Performance – Project Execution (1/2) Execution risk management • Excellent safety performance • Anglo FeNi plant operation and design experience • Proven process route and the ore has been treated on a commercial scale (by Codemin) since 2004 • Low schedule risk – Engineering is completed –
Slide 34: Project Performance – Project Execution (2/2)
Project Performance – Project Execution (2/2) Overall project progress at 71% in August 2009, in line with plan Engineering Procurement Construction OVERALL % Progress % Progress % Progress % Progress 100 100 P lan 100 100 A ctual P lan P lan A ctual A ctual A ctual 80 80 80 80 60 60 60 60 40 40 40
Slide 35: Project Performance – Successful Commissioning
Project Performance – Successful Commissioning Clear commissioning plan in place to ensure operational success Best Practice: Key Concepts Best Practice in action 1 • Group approach to Risk Management – Identification / Evaluation / Rating Integrated Risk Management – Development of Strategies – Ris
Slide 36: Conclusion
Conclusion Key messages from today’s visit Successful execution of large scale, greenfield project with world-class 1 safety performance Low operating costs and risk – proven, technical expertise, supported by 2 Anglo group functions 3 Major resource base offers significant optionality Delivery on g
Slide 37: Questions and Answers
BARRO ALTO PROJECT Questions and Answers
Slide 38: Site Visit Overview
Site Visit Overview 2 3 1. Training Centre 2. Belvedere 3. Drying plant 4. Electric furnaces 5. Rotary kilns 6. Workshop 5 6 7. Warehouse 4 7 1 37