African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — Deutsche Bank BRICS Metals & Mining Conference 2011
26 slides from African Rainbow Minerals's conference presentation, Nov 2, 2011
Slide 1: Deutsche Bank BRICS Metals & Mining Conference 2 – 3 November 2011
Deutsche Bank BRICS Metals & Mining Conference 2 – 3 November 2011 Stompie Shiels: Executive Director, Business Development
Slide 2: Confident about the future of our business
CONFIDENT ABOUT THE FUTURE OF OUR BUSINESS 2
Slide 3: Disclaimer
Disclaimer Certain statements in this report constitute forward looking statements that are neither reported financial results nor other historical information. They include but are not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, pla
Slide 4: Group structure
Group structure African Rainbow Minerals FaxtM African Rainbow Minerals (roo) (100%) @ (51%) (100%) 00%) (15%) im Coal Copper Exploration Harmony Pocus cone — 50% Modikwa'" 50% Khumani 20% Xstrata Coal 50% Konkola North! 55% Two Rivers” | | 50% Beeshoek South Africa 50% Lusaka & Iron Ore Kabwe Se 50
Slide 5: Significant increase in iron ore revenue contribution
Significant increase in iron ore revenue contribution F2010 Revenue F2011 Revenue Nickel Nickel 11% 10% Iron Ore 23% Iron Ore 35% Platinum 29% Platinum 22% Manganese Coal 27% 3% Coal Chrome 2% Chrome 8% Manganese 8% 22% 5
Slide 6: Earnings profile
Earnings profile Headline earnings (R million) 4 500 4 013 4 000 3 500 3 319 3 000 2 500 2 317 2 000 1 714 1 500 1 207 1 000 462 500 339 0 F2005 F2006 F2007 F2008 F2009 F2010 F2011 6
Slide 7: ARM declared a 5th consecutive dividend
ARM declared a 5th consecutive dividend Headline earnings per share and dividends per share (cents per share) 2 500 2 000 1 906 1 559 1 500 1 094 1 000 807 580 500 400 450 166 225 150 175 200 0 F2005 F2006 F2007 F2008 F2009 F2010 F2011 Headline earnings per share Dividends per share 7
Slide 8: Robust financial position
Robust financial position Net cash/ (net debt) excluding partner loans (R million) Net cash 2 594 2 500 1 811 1 575 1 500 500 174 ( 500) ( 932) (1 500) (1 307) Net debt (1 855) (2 500) F2005 F2006 F2007 F2008 F2009 F2010 F2011 8
Slide 9: Strategy
strategy Entrepreneurial Owner operator Profit focused Partner of choice management World-class management team 9
Slide 10: Strong focus on cost control
Strong focus on cost control ARM target for operations on the respective global cost curve by 2012 (ARM estimate, benchmarked at steady-state/normalised production volumes) 10
Slide 11: On mine cash costs
On mine cash costs ARM Ferrous ARM Platinum ARM Coal Capitalisation of costs was terminated Accelerated ramp-up of the Khumani as GGV reached steady state. Nkomati Mine unit cash costs increase Project together with production due to lower than expected recoveries PCB costs were impacted by losses d
Slide 12: Aggressive growth in iron ore continues
Aggressive growth in iron ore continues Iron ore sales volumes (on 100% basis – million tonnes) 18 16.0 16 15.1 14 2 X 2010 12.4 growth strategy 12 9.8 10.0 10 8 5.8 6 4 2 0 F2005a F2010a F2011a F2012e F2013e F2014e The “a” included in the x-axis refers to actual and the “e” to estimated 12
Slide 13: Logistics
Logistics Saldanha export channel Current capacity: 60 mtpa Potential expansion capacity: 93 mtpa (dual product) 13
Slide 14: Aggressive growth in nickel continues
Aggressive growth in nickel continues Nickel produced volumes (on 100% basis – thousand tonnes) 25 20.5 20 17.0 2 X 2010 15.3 15 growth strategy 9.7 10.1 10 5.3 5 0 F2005a F2010a F2011a F2012e F2013e F2014e The “a” included in the x-axis refers to actual and the “e” to estimated 14
Slide 15: Nkomati Nickel Expansion Project
Nkomati Nickel Expansion Project Commodities produced, per annum, at steady state: 20 500 tonnes Nickel 110 000 ounces Platinum Group Metals 10 000 tonnes Copper 1 000 tonnes Cobalt 500 000 tonnes Chrome concentrate 15
Slide 16: Aggressive growth in coal
Aggressive growth in coal Goedgevonden thermal coal sales volumes (on 100% basis - million tonnes) 8 7.0 7.0 7.0 7 6 5.4 5 2 X 2010 growth strategy 4 3 2.9 2 1 0.86 0 F2006a F2010a F2011a F2012e F2013e F2014e Domestic thermal coal Export thermal coal The “a” included in the x-axis refers to actual a
Slide 17: Delivering quality growth projects
Delivering quality growth projects Large opencast mines. Low cost operations, all below the 50th percentile of the global curve at steady state. Long life mines, all in excess of 25 years. Limited financial risk on the projects with most of capital already spent. 17
Slide 18: Aggressive growth in copper
Aggressive growth in copper Konkola North copper sales volumes (on 100% basis – thousand tonnes) 60 50 48.3 48.9 45.6 40.6 40 30 20 17.5 10 0 F2013e F2014e F2015e F2016e F2017e The “e” included in the x-axis refers to estimated 18
Slide 19: Significant investment in growth
Significant investment in growth ARM’s Capital Expenditure F2005 – F2011 F2012 – F2014 R16.9 bn R10.1 bn F2005 – F2014 Growth projects + Investment in R27.0 bn completed growth Partners’ Capital Expenditure F2005 – F2011 F2012 – F2014 F2005 – F2014 R13.8 bn + R9.1 bn R22.9 bn Projected total investm
Slide 20: Growth projects continue
Growth projects continue Attributable capital expenditure by division (R million)* 5 000 4 500 4 300 4 000 3 500 3 333 3 404 3 400 3 000 2 738 2 400 2 500 2 000 1 500 1 000 500 0 F2009a F2010a F2011a F2012e F2013e F2014e ARM Copper ARM Coal ARM Ferrous ARM Platinum *The forecasted capital expenditur
Slide 21: Conversion of ferrochrome furnaces
Conversion of ferrochrome furnaces No. 5 Furnace successfully converted from a ferrochrome furnace to ferromanganese. Conversion of two additional furnaces to be completed by end 2012 financial year. Ferromanganese 2011 2014 Production (in tonnes) 291 000 450 000 Ferrochrome 2011 2014 Production (in
Slide 22: Further growth
Further growth Potential Future Projects • Iron ore expansion beyond 16mtpa • Manganese ore expansion to 6mtpa • Smelter expansions • Doubling of Modikwa Platinum Mine • Two Rivers Merensky Project • Kalplats Platinum project • Konkola North Area A • Kalumines Copper Project • Exploration with Rovum
Slide 23: A robust growth pipeline
FaxrtM African Rainbow Minerals A robust growth pipeline Exploration to Project development Steady state Declining feasibilty and ramp up (>15 years life-of-mine) operations Beeshook Iron Ore Thermal coal mines Manganese and chrome smelters Manganese ore mines Two Rivers Platinum Mine Modikwa Platin
Slide 24: Strong financial position
Strong financial position EBITDA excluding exceptional items Cash on statement of financial position R million R million 8 000 4 000 3 668 7 229 3 513 7 000 6 434 3 500 3 039 6 000 3 000 2 660 5 000 4 484 2 500 4 000 3 907 2 000 2 887 1 500 3 000 1 063 2 014 1 000 2 000 1 552 500 288 439 1 000 0 0 F
Slide 25: Conclusion
Conclusion ARM has delivered significant growth in the preceding 5 years. Aggressive growth continues. ARM plans to spend R10 billion (on an attributable basis) on capital expenditure over the next three years. Future growth is supported by a strong financial position that will allow ARM to fund its
Slide 26: Questions
Questions Provisional results for the year ended 30 June 2011
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