Valterra Platinum Limited · JSE:VAL
Valterra Platinum — FY2022 Earnings Presentation
59 slides from Valterra Platinum's earnings presentation, Feb 20, 2023
Slide 1: 2022 annual results
iglo American Platinum )22 annual results 20 February 2023
Slide 2: Disclaimer
Disclaimer American Platinum will operate in the future. Important factors Certain statistical and other information about that could cause Anglo American Platinum’s actual results, Anglo American Platinum included in this presentation is sourced This presentation has been prepared by Anglo American
Slide 3: Agenda
Key highlights and operating context – Natascha Viljoen 4 ESG performance 8 Operational performance 13 Financial performance – Craig Miller 16 Market performance 21 Operational excellence and optionality – Natascha Viljoen Short term 29 Long term 34 In closing 38 Amandelbult headgear 3
Slide 4: Key highlights and operating context
Key highlights and operating context Water sampling at Mototolo / Der Brochen
Slide 5: Key highlights
Key highlights Safety Production EBITDA Mining EBITDA % 1 Lowest TRCFR Record at Unki R74bn 57% and Mototolo Stakeholders Environment ROCE Net cash R131bn Steps to carbon 111% R28bn neutrality taken 5
Slide 6: Key highlights: context and mitigations
Key highlights Macro- economic Supply-chain Socio-economic Electricity Global inflationary Quality and delay issues Community unrest Continued request for Context pressures curtailment Russia-Ukraine Rising interest rates uncertainties Escalating costs 2 Prioritised and focused capital investments a
Slide 7: Our Purpose and four strategic priorities
Key highlights Our Purpose is: “ Re-imagining mining to improve people’s lives” Four priorities for strategy delivery: A leader in ESG Go beyond resilience, thrive Maximize value from Stimulate new markets and through change our core leverage new capabilities 7
Slide 8: ESG performance
ESG performance 8 Water sampling at Mototolo / Der Brochen
Slide 9: Significant focus on elimination of fatalities
ESG performance Significant focus on elimination of fatalities Lowest recorded number of safety incidents 1 Loss of life (owned managed operations) Total Recordable Cases Frequency Rate (per million hours) 10.63 -57% 5 4.52 -48% 2 1 1 2.34 0 0 2017 2018 2019 2020 2021 2022 2012 2017 2022 9
Slide 10: Tackling gender based violence, Olifants River, creating jobs
ESG performance Tackling gender based violence Olifants River management Creating jobs outside the mine gate We strive to make a meaningful Delivery of potable and bulk water to ~6 jobs created for every 1 job on site impact in addressing gender based certain areas in the Northern and across our com
Slide 11: Carbon emissions – a roadmap to neutrality
ESG performance Carbon emissions – a roadmap to neutrality Mt CO2e 2 Traction on embedded projects 5.5 • Construction of Mogalakwena 100MW Solar PV to start in Q2 2023 4 • Feasibility study of 100MW solar at Amandelbult and 40MW solar at Unki 2.5 underway 1 Envusa Energy fast-tracking 30% of total -
Slide 12: Contribution to stakeholders and society
ESG performance Taxes and royalties Local procurement Contribution to stakeholders and society Rand billion R19bn R25bn 148 131 Salaries and wages Social investment R15bn R600m 66 39 Capital investment Dividends 2019 2020 2021 2022 R17bn R55bn Taxes & royalties Salaries & wages Local procurement inc
Slide 13: Operational performance
Operational performance Dishaba colleagues
Slide 14: Mine production and EBITDA margins
Operational performance Mogalakwena Amandelbult Mototolo Unki 000 PGM ounces 000 PGM ounces 000 PGM ounces 000 PGM ounces 1,215 232 773 290 713 205 1,026 244 2021 2022 2021 2022 2021 2022 2021 2022 EBITDA margin 63% 52% 61% 47% 14
Slide 15: Smelter utilisation
Operational performance Percentage utilisation 100% Higher utilisation at Waterval and Mortimer smelters 75% Net work-in-progress inventory build- up of 100koz PGM 50% Gross build up ahead of the Polokwane smelter was 340koz PGM 25% 0% Mortimer Polokwane Waterval Q1 Q2 Q3 Q4 15
Slide 16: Financial performance
Financial performance ACP Phase A – Furnace matte tap
Slide 17: Financial performance highlights
Financial performance Dollar PGM basket price EBITDA Mining margin $2,551 R74bn 57% ROCE Net cash 2022 dividend declared 111% R28bn R30bn R115 per share/62% pay-out 17
Slide 18: Cash costs up 11%
Financial performance Cash costs up 11% Controllables R/PGM oz 5% reduction in energy consumed 17,800 Optimising consumption of consumables 1,568 16,800 939 15,338 12,831 SA Mining inflation ~18% 2021 Production Costs 2022 2023 Guidance headwinds Inflationary pressures remain Annual cost increases (
Slide 19: Total capital
Financial performance Total Capital (Rand billion) Capital Focus Asset reliability ~22 - 23 • Maintenance for safe and ~4.4 stable operations 16.9 • Furnace rebuilds 6 13.6 2.8 ~4.1 • Compliance to GITSM 2.8 3.6 Life extension at Mototolo/Der ~9.0 – 11.0 3.0 Brochen project ~13.5 -14.5 10.5 Growth a
Slide 20: 2022 dividend
Financial performance 2022 dividend per share Dividend per share 2022 dividend declared H2 R115/share R30bn R84/ Share H2 R34/ 62% Share pay-out 7 ratio Dividend pay-out ratio Dividend yield H1 R101/ H1 Share R81/ Share 62% 8% Headline Dividend per earnings per share share 20
Slide 21: Market review
Market review PMR: Palladium good delivery bar with grain
Slide 22: US$ basket price – annual realised price
Market review 8 US$ basket price – annual realised price Second-highest average after record in 2021 2,886 Palladium reached record 2,551 high in Q1 1,965 Palladium and Rhodium traded in line with changing automotive production 1,233 963 845 749 2016 2017 2018 2019 2020 2021 2022 22
Slide 23: Platinum market price in various currencies
Market review 9 Platinum market price in various currencies, start 2022 = 100 Platinum gained over the year Platinum fall worsened Platinum gain enhanced by US$ strength by US$ weakness Tightening supply/demand 120 balance a key underlying factor 110 Short-term price moves driven by swings in USD 10
Slide 24: Automotive production recovery and 2023 demand outlook
Market review Automotive production recovery continues 10 2023’s uncertain automotive demand outlook Annual production (year-on-year %), million vehicles 100 2023 Pent-up demand Independent -6% 90 7% forecasts 4-6% Low inventories 80 3% -16% 2022 Strong labour markets 70 60 China’s reopening and sti
Slide 25: Global 3E PGM refined mine supply
Market review Global 3E PGM refined mine supply 11 Issue Outlook 000 ounces/year Covid-19 Improved workplace practices and 14,500 vaccines 14,000 Geopolitics Worsening with no signs of improvement 13,500 Asset reliability Ongoing issues at many operations 13,000 12,500 Climate change Physical impact
Slide 26: Platinum, palladium and rhodium balances
Market review Platinum 12 Palladium 12 Rhodium 12 Future demand from gasoline Near balance in 2023, thereafter a Recovering industrial demand substitution & hydrogen economy surplus on weaker gasoline vehicle leads to another deficit in 2023, drives ongoing deficit production in medium term thereaft
Slide 27: High-end BEV forecasts imply severe resource challenges
Market review 13 High-end BEV forecasts imply severe resource challenges Millions of BEVs & PHEVs per year 2040/2021 Non-PGM using BEV share 10x lithium continues to rise 100 6x graphite 90 Growing concern about battery Unconstrained 80 10x lithium metal availability forecast 6x graphite 70 Lithium
Slide 28: Hydrogen economy drivers
Market review 14 Renewable Energy Policy support Electrolyser Distribution Demand drivers ever more plentiful broadening production improving flourish expanding Rapid growth in USA’s IRA game- Multiple pathways installation of wind changer subsidies Doubled in 2022; to Plans for 100 hydrogen needed
Slide 29: Short term
Short term XX Mogalakwena remote operated drill rig
Slide 30: Three-year guidance
Short term Three-year guidance …emphasis on the following PGM volumes (million ounces) Own JV Own JV POC POC Mogalakwena Amandelbult Energy reliability 2023 2024 2025 2032 Platinum (Moz) 1.65 – 1.85 1.65 – 1.85 1.6– 1.8 1.7– 2.0 Asset integrity Palladium (Moz) 1.15 – 1.25 1.15 – 1.25 1.1 – 1.2 1.3 –
Slide 31: Future of Mogalakwena
Short term Headwinds Future of Mogalakwena Mining through lower grade areas Waste-dumping sites Excessive rainfall events efficiencies (P101) Technology & Operational innovation Integrated Mitigation and successes six key workstreams Increased drilling and improved geological modelling Increased per
Slide 32: Future of Amandelbult ore reserve and resource
Short term Near Term Open Pit – increased confidence Long Term Open Pit – no material change in ore reserve Underground – potential resource grade encouraging 32
Slide 33: Modernisation, concentrators, mechanisation
Short term Modernisation Concentrators Mechanisation Continue modernisation program Optimising concentrator Progress the mechanisation as base case infrastructure • Cycle mining • Merensky plant closure • Progress trial at 15 East • Timberless stoping • Improve milling efficiencies and • Progress th
Slide 34: Long term
Long term XX Mogalakwena remote operated drill rig
Slide 35: Growing own mine contribution
Long term Growing own mine contribution …capturing superior EBITDA margins 23 PGM volumes (million ounces) Own JV Own JV POC POC >35 30 15 15 Own POC Own POC 2022 Long-term 2023 2024 2025 2032 Platinum (Moz) 1.65 – 1.85 1.65 – 1.85 1.6– 1.8 1.7– 2.0 Palladium (Moz) 1.15 – 1.25 1.15 – 1.25 1.1 – 1.2
Slide 36: Value chain and PGM production mix
Long term Processing Marketing and Exploration Mining Concentrating Smelting Refining market development Leading capabilities, achieving operational excellence and deploying technology (FutureSmart Mining) % PGM production Pt Pd Rh Ir Ru 1% Mogalakwena (~1.0moz pa) 42% 46% 3% 3% Amandelbult (~0.7moz
Slide 37: PGM volumes by mine and projects
Long term Mogalakwena Amandelbult Mototolo / Der Brochen Execution Technology 15e drop down Der Brochen south decline Community relationships • Project development commenced Downstream processing Exploration decline Studies Third Concentrator Future of Amandelbult Sandsloot Underground • Middellaagt
Slide 38: 2030 targets and progress
In closing 2030 Target 1 Mechanised and modernised operations, 100% 88% % of own-mine PGM production 2 Cost curve position, (out of 4 mines) All mines in H1 3 out of 4 mines 3 Mining EBITDA margin, % ~35 - 40% Achieved 57% 4 ROCE, % ~25 - 35% Achieved 111% 5 jobs off site for 5 Communities, jobs sup
Slide 39: Thank you
Thank you
Slide 40: Appendix
Appendix Mogalakwena drilling and exploration
Slide 41: Appendix
Appendix dou |OUebd — DUaMyADI|OBoy|
Slide 42: Indexed market prices
Appendix 15 Indexed market prices (1 Jan 2020=100) 550 500 450 400 350 300 250 200 150 100 50 Jan 20 Jul 20 Jan 21 Jul 21 Jan 22 Jul 22 USD Basket ZAR basket Pt Pd Rh Ir Ru 42
Slide 43: Platinum supply and demand balance
Appendix Supply and demand balance 16 2022 gross demand by segment 16 000 ounces Fuel cells 1% Automotive 1,020 Industrial 40% 39% 350 570 7m ounce market 210 -170 Jewellery -220 -260 20% -490 2016 2017 2018 2019 2020 2021 2022 2023 43
Slide 44: Palladium supply and demand balance
Appendix Supply and demand balance 17 2022 gross demand by segment 17 000 ounces Jewellery 1% Industrial 15% 10m ounce market -60 -80 -170 -160 -480 -700 -670 Automotive 84% -960 2016 2017 2018 2019 2020 2021 2022 2023 44
Slide 45: Rhodium supply and demand balance
Appendix 18 18 Supply and demand balance 2022 gross demand by segment 000 ounces Jewellery Industrial 1% 10% 80 50 30 30 1.1m ounce market -30 -30 -70 Autocatalyst 89% -90 2016 2017 2018 2019 2020 2021 2022 2023 45
Slide 46: Light vehicle ownership and sales v GDP per capita
Appendix 19 Light vehicle ownership per 1,000 people v GDP per capita Light vehicle sales per 1m people v GDP per capita 19 50 1000 United States 45 900 United States 40 Japan 800 35 South Korea 700 30 600 Japan EU&UK EU&UK 25 500 South Korea 20 400 Brazil Mexico China 300 15 200 China 10 Nigeria Br
Slide 47: Rising PGM loadings
Appendix 20 Rising PGM loadings – example Euro gasoline LDV Euro emissions standards 24 5 5b 6b 6c 6d 7 (estimate) Loading 2010 2015 2020 2025 2030 47
Slide 48: Projected autocatalyst recycling volume
Appendix 21 Projected autocatalyst recycling volume Autocatalyst recycling (000 ounces per annum) volumes set to increase as scrapped cars have higher 6,000 loadings 5,000 Well-established trends 4,000 expected to continue - mature autocat recycling 3,000 market 2,000 Palladium volumes will grow fas
Slide 49: South African hydrogen freight corridor
Appendix We have helped create a consortia of strategic industry partners to promote the development of a South African hydrogen freight corridor. Indicative visualisation of the corridor 22 Overview of deployment strategy Trial Phase Small bus project (~20 buses) supplied by hydrogen trucks with a
Slide 50: Cash from operations and capital allocation
Appendix R45bn Cash from operations excluding taxes and royalties R55bn 2021 H2 (R33.5bn) and 2022 H1 dividend (R21.5bn) R14bn 2022 sustaining capital Portfolio upgrade Additional shareholder returns Future project options including ESG R3bn 2022 expansion/breakthrough capital 50
Slide 51: Production guidance 2023E-2025E
Appendix Unit 2023E 2024E 2025E Metal-in-concentrate (M&C) Total PGMs (m ounces) 3.6 – 4.0 3.6 – 4.0 3.5 – 3.9 Platinum (m ounces) 1.65 – 1.85 1.65 – 1.85 1.6 -1.8 Palladium (m ounces) 1.15 – 1.25 1.15 – 1.25 1.1 – 1.2 Other PGMs and gold (m ounces) 0.8 – 0.9 0.8 – 0.9 0.8 -0.9 Refined production To
Slide 52: Capital expenditure
Appendix 3.5 4.0 4.4 2.5 0.9 2.5 Life extension 2.8 0.4 5.0 1.5 Growth / breakthrough capital 4.1 2.8 3.6 4.5 Capital waste stripping 3.1 Stay-in business 10.0 – 11.0 11.0 9.6 9.0 7.3 2021 2022 2023E 2024E 2025E Capital expenditure 2021 2022 2023E 2024E 2025E Total Sustaining capital (R billion) 10.
Slide 53: Sensitivity analysis - 2022
Sensitivity analysis - 2022 30 December 2022 spot Average realised Impact of 10% change in price/FX Commodity / unit Platinum ($/oz) 1,074 962 3,906 Palladium ($/oz) 1,793 2,076 5,026 Rhodium ($/oz) 12,250 15,600 5,924 Gold ($/oz) 1,841 1,786 235 Nickel ($/ton) 30,077 25,731 718 Copper ($/ton) 8,410
Slide 54: Net cash movement
Net cash Cash Effect of Net cash Economic 31 generated SIB & waste Project Deferred Exchange Dividends 31 Assets free cash Tax paid Other December from capital capital * consideration rate changes paid December flow 2021 operations on cash 2022 Mogalakwena 23,457 (8,201) 15,256 (1,787) Amandelbult 1
Slide 55: Cost base
Sundry 2022 Cost base (Rbn) Volume % PGMs (koz) Labour Contractors Utilities Consumables Maintenance expenses Opencast Mining 8.3 41% 1,056 15% 6% 2% 40% 26% 11% Conventional Mining 9.2 30% 829 38% 9% 7% 23% 17% 6% Mechanised Mining 10.4 29% 764 56% 5% 8% 16% 8% 7% Concentrating 8.2 14% 1% 21% 26% 2
Slide 56: Revenue and basket prices by mine
Joint Company Mogalakwena Amandelbult Mototolo Unki Mining POC/Other operations (ex-trading) Net sales revenue (US$ million) from platinum 395 328 108 91 156 1,078 582 1,660 from palladium 979 341 153 178 229 1,880 639 2,519 from rhodium 548 1,032 318 152 504 2,554 1,417 3,971 from other metals 553
Slide 57: All-in sustaining costs by mine
Mogalakwena Amandelbult Mototolo Unki Modikwa Kroondal Other Mining Costs (US$ million) Cash operating costs 837 797 245 217 162 223 2,481 Other costs and marketing 220 227 55 98 22 38 15 675 Capitalised waste costs 219 219 Stay-in-business capital 284 84 32 30 34 25 22 511 a Total Cost 1,560 1,108
Slide 58: Rand financial reconciliation by mine
Attributable joint Exit and Company – (R million) Mogalakwena Amandelbult Mototolo Unki Mined POC & toll Trading Other Company operations C&M mines (ex trading) share a = (b x Net revenue 40,352 32,889 10,638 9,198 16,189 109,266 53,314 1,510 164,090 162,580 c)/1000 + d b Basket price per PGM ounce
Slide 59: Definitions and footnotes
1) Total recordable case injury frequency rate (TRCFR) is a measure of all injuries requiring treatment above first aid per 1,000,000 hours worked (slide 5) 2) CO2e (carbon dioxide equivalent) compares the emissions from various greenhouse gases on the basis of their global warming potential by conv