Anglo American Plc · LSE:AAL
Anglo American — Merger or Acquisition (January 2020)
27 slides from Anglo American's merger presentation, Jan 20, 2020
Slide 1: Offer for Sirius Minerals
OFFER FOR SIRIUS MINERALS 20 January 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT NOT FOR RELEASE, PRESENTATION, PUBLICATION, OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION This presentation has been prepared by Anglo American plc (“Angl
Slide 3: A Compelling Fit and Opportunity
A COMPELLING FIT AND OPPORTUNITY Clear Strategic Fit Competitive Product Well Progressed Project Potential Tier 1 asset Multi-nutrient, low-chloride Attractive returns Long life, low cost, scaleable POLY4 contains established nutrients, $1.1bn invested, key permits in place, suited to population gro
Slide 4: Agenda
AGENDA Introduction Mark Cutifani POLY4: A Multi-nutrient product Duncan Wanblad Potential Tier 1 asset Duncan Wanblad Fit with our strategy and capabilities Mark Cutifani 4
Slide 5: Offer Summary
OFFER SUMMARY Recommended cash offer for the entire share capital of Sirius 5.5 pence in cash for each Sirius share Overview Values issued share capital of Sirius at ~£405m (~$529m)1 funded from existing cash balances Sirius net debt of ~£119m (~$157m) (as at 31 December 2019)2 Transaction to be imp
Slide 6: Significant Development Progress Made
SIGNIFICANT DEVELOPMENT PROGRESS MADE ~25% of expected capex spent… …and remaining capex to be optimised Committed to disciplined capital allocation framework 2020/21: update & optimise development timeline / design Spend broadly aligned to Sirius’s revised plan $1.1bn Integrate with Operating Model
Slide 7: Disciplined Capital Management
DISCIPLINED CAPITAL MANAGEMENT Resilient balance sheet Commitment to dividend payout ratio <1.5x 40% bottom of the cycle net debt:EBITDA5 of underlying earnings With value adding, disciplined growth 7
Slide 8: POLY4: A Multi-nutrient Product
POLY4: A MULTI-NUTRIENT PRODUCT Duncan Wanblad
Slide 9: POLY4 Contains Established Nutrients
POLY4 CONTAINS ESTABLISHED NUTRIENTS Key nutrient N P K Nitrogen Phosphates Potassium Secondary S Ca Mg Sulphur Calcium Magnesium nutrients Other key Low Organic & benefits Micro-nutrients chloride Low carbon 9
Slide 10: A Multi-nutrient Fertiliser
A MULTI-NUTRIENT FERTILISER Current main potassium fertiliser sources MOP (Muriate of potash)6 SOP (Sulphate of potash)6 POLY46 Chloride Chloride Chloride Sulphur Calcium Magnesium Potassium Sulphur Potassium Potassium ~65Mt market ~7Mt premium market Low cost, high value substitute Sulphur supports
Slide 11: With a Leading Cost Position
WITH A LEADING COST POSITION ~65Mt MOP cost curve ~7Mt SOP cost curve POLY4 cost expected to fall within Q17 POLY4 cost expected to fall within Q17 11
Slide 12: How We Realise Value from POLY4
HOW WE REALISE VALUE FROM POLY4 Duncan Wanblad
Slide 13: Underpinned by Established Nutrients
UNDERPINNED BY ESTABLISHED NUTRIENTS Value-in-use8 from key nutrients Upside from micro-nutrients Sustainable product ~$200/t Low chloride MgO ~4% yield improvement, Low carbon, chemical-free plus improved resistance production S to disease and drought9 K2O POLY4 Implied value-in-use based on curren
Slide 14: Identified Demand Based on Substitution
IDENTIFIED DEMAND BASED ON SUBSTITUTION Market attractiveness by nutrient10 More attractive Less attractive Low-Cl K2O Low-Cl K2O MgO S Low-Cl K2O Low-Cl K2O MgO S MgO S MgO S Low-Cl K2O Low-Cl K2O MgO S MgO S Sharing incentives with >10Mtpa offtake agreements established players Weighted ave price
Slide 15: POLY4: A Sustainable Product
POLY4: A SUSTAINABLE PRODUCT Duncan Wanblad
Slide 16: Simple, Clean and Sustainable Production
SIMPLE, CLEAN AND SUSTAINABLE PRODUCTION MOP12 SOP12 POLY412 Ore mined Brine from solution Ore mined Ore mined Evaporation & Residue removal Crushing crystallisation Salt separation & Calcination de-bringing Hot leaching Water Leach KCl crystallisation Filtration KCl separation Evaporation Crushing
Slide 17: Low Carbon Footprint
LOW CARBON FOOTPRINT POLY4 production generates 93% less CO2 than SOP and 85% less than MOP13 Kg CO2e per tonne fertiliser POLY4 51 SSP/TSP 200 MOP 350 Common chemical MAP 500 fertilisers SOP 766 DAP 800 AS 840 17
Slide 18: Potential Tier 1 Asset
POTENTIAL TIER 1 ASSET Duncan Wanblad
Slide 19: Mechanised Operations and Simple Processing
MECHANISED OPERATIONS AND SIMPLE PROCESSING Mine Underground conveyor Processing & port facilities 1500m access and hoisting shafts 37km conveyor Dedicated export facilities Mechanised underground operation: Through a single strata Granulation plant: energy efficient, 25m seam thickness chemical-fre
Slide 20: Potential Tier 1 Asset
POTENTIAL TIER 1 ASSET Integrated operation: mine, conveyor, processing plant & port facility 290Mt JORC reserve14 Long life & large scale 29 year life at 10Mtpa Unit cost ~$40-50/t15 Low cost Potential >50% EBITDA margin 2.69Bt JORC resource Scaleable Potential expansion opportunities 20
Slide 21: Fit with Our Strategy & Capabilities
FIT WITH OUR STRATEGY & CAPABILITIES Mark Cutifani
Slide 22: Projects on Time and on Budget
PROJECTS ON TIME AND ON BUDGET Quellaveco (Copper) Marine Namibia (Diamonds) 2020 capex (100%) 2020 capex16 ~$1.5bn to ~$1.7bn ~$0.1bn Our share16: ~$0.9bn to ~$1.0bn Project on track High value diamonds Plant earthworks complete, concrete progressing well, first steel and equipment installed Constr
Slide 23: Project Supporting a Sustainable Future
PROJECT SUPPORTING A SUSTAINABLE FUTURE Environmental benefit Social benefit Governance More productive farming, High quality industrial jobs Developed jurisdiction: supporting a greener, lower supporting local strong governance and carbon world regeneration corporate standards Underpinned by Future
Slide 24: Leveraging Our Capabilities
LEVERAGING OUR CAPABILITIES Operating capabilities Marketing & Sustainability Disciplined capital allocation Operating Model/P101 driving benchmark performance Integrated Marketing Model with phosphates experience Optimisation of development profile & process Leading solutions through Future
Slide 25: Real Mining. Real People. Real Difference.
Real Mining. Real People. Real Difference.
Slide 26: Footnotes
FOOTNOTES 1. USD / GBP FX rate as at 16 January 2020 of 1.3006. 2. £59.9m unrestricted cash, $236.6m value of outstanding convertible bonds. USD / GBP FX rate as at 31 December 2019 of 1.32475. 3. With rights reserved to switch to an offer. 4. $1.1bn project spend incurred to 30 September 2019 exclu
Slide 27: Investor Relations
INVESTOR RELATIONS Paul Galloway paul.galloway@angloamerican.com Tel: +44 (0)20 7968 8718 Robert Greenberg robert.greenberg@angloamerican.com Tel: +44 (0)20 7968 2124 Emma Waterworth emma.waterworth@angloamerican.com Tel: +44 (0)20 7968 8574 27
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