Anglo American Plc · LSE:AAL
Anglo American — Investor Presentation (December 2022)
45 slides from Anglo American's investor presentation, Dec 9, 2022
Slide 1: Anglo American, 9 December 2022
9 December 2022 Anglo American
Slide 2: Cautionary statement
Cautionary statement Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written (except as required by applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules, the Disclosure materials/slides for a presentation concerning A
Slide 3: Focused on our strategic priorities
Focused on our strategic priorities 1 Safety 2 Stability 3 Sustainability 4 Growth 3 Anglo American
Slide 4: Safety is our first priority
Safety is our first priority Fatalities1 2 Setbacks in our continuous improvement journey to zero harm Re-focus required following disruption of Covid TRIFR1,2 Planned work drives safer outcomes 2.31 4 Anglo American
Slide 5: 2022 operating performance & outlook
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style 2022 operating performance & outlook Duncan Wanblad
Slide 6: Challenging and dynamic operating context
Challenging and dynamic operating context Covid Geopolitics & Climate impacts recession change Covid recovery & Conflict, recession risks & Higher frequency of extreme China zero covid policy rising societal expectations weather events 6 Anglo American
Slide 7: Sequential performance improvement in 2022 as stability is re-embedded
Sequential performance improvement in 2022 as stability is re-embedded 2022F copper equivalent production3 +19% Challenging operational start to 2022 Streamlined operational focus on stable delivery Recovery continued in Q4 H1 H2F 7 Anglo American
Slide 8: Step-up in H2 performance despite some operational challenges
Step-up in H2 performance despite some operational challenges Diamonds Base Metals Strong operating performance Quellaveco ramping up Benefit of Venetia OP final cut Ore characteristics at Los Bronces PGMs Bulks Stable production at Minas-Rio Stable operating performance Kumba – improved mining stab
Slide 9: Attractive 10%+ growth by 2024 – despite guidance revisions
Attractive 10%+ growth by 2024 – despite guidance revisions Diamonds4 Base Metals5 ↓1Mct ↓80kt ↓10kt Slower Venetia underground Lower grades & challenging ramp-up 840- 910- 840- ore in Chile 30-33 29-32 32-35 930 1,000 930 Higher grade in 2025 Quellaveco ramp-up profile 2023F 2024F 2025F 2023F 2024F
Slide 10: Leveraging our leading capabilities to maximise portfolio potential
Leveraging our leading capabilities to maximise portfolio potential ~25% organic growth optionality over the next decade Operational focus on getting the basics right Operating Model provides stability & identifies capability +25% Focused on strategy execution +5% +11% Leading technology & holistic
Slide 11: The numbers
The numbers Stephen Pearce
Slide 12: 2022 full year guidance
2022 full year guidance Capex9 Production3 Working capital build ~$5.7bn ~3% ~$2.0-2.5bn Lower due to delays, deferrals & Fx vs 2021 Depreciation10 Unit cost11 Tax rate10 ~$2.6bn ~16% 33-35% Lower reflecting production impacts vs 2021 12 Anglo American
Slide 13: Sustainable focus on costs in 2023
Sustainable focus on costs in 2023 2023F copper equivalent unit costs vs 2022F11 ~9% excluding the benefit of Quellaveco ~1% ~1% ~3% ~5% ~2% Volumes Cost inflation FX Other 2023F 13 Anglo American
Slide 14: Capex cost inflation offset by deferrals
Capex cost inflation offset by deferrals Capex9 ~5.7 6.0-6.5 5.5-6.0 5.0-5.5 2022 lower due to weather, permitting $bn delays, deferrals & weaker Fx ~0.8 1.6-2.1 Sustaining capex guidance maintained & Woodsmith ~0.5 ~0.7 underpins stability ~0.7 ~0.3 ~0.7 Growth ~1.2 ~0.3 ~0.3 SA renewables ~0.3 & n
Slide 15: Generating holistic value as we progress towards our sustainability goals
Generating holistic value as we progress towards our sustainability goals Renewable electricity nuGenTM Zero Emissions Haulage Solution 100% secured from 2025 in Australia, Brazil, Chile, Peru Combination with First Mode – completion expected Jan 2023 All contracts NPV accretive Innovative t
Slide 16: Our balanced offering: balance sheet, shareholder returns and value-adding growth
Our balanced offering: balance sheet, shareholder returns and value-adding growth Strong balance sheet Attractive returns Quality growth 0.3x 40% payout >90% H1 2022 base, through the cycle growth capex in future-enabling net debt:EBITDA10 dividend & high margin products9 16 Anglo American
Slide 17: Future-enabling portfolio positioned for long-term demand themes
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style Future-enabling portfolio positioned for long-term demand themes Duncan Wanblad
Slide 18: A carbon neutral world requires metals and minerals
A carbon neutral world requires metals and minerals Supply is constrained Requiring significant capital >10 years to >$1tn bring on new mines needed by 205013 ~7 ~60 new Quellaveco size 4 ~4 ~4 copper mines needed by 204012 2 2010-2015 2016-2021 2022-2030F 2031-2040F 2041-2050F Capex required $bn (’
Slide 19: Our diversified portfolio is suited to future demand trends
Our diversified portfolio is suited to future demand trends Copper equivalent production3 Steelmaking Diamonds Coal Long term energy transition enabler High quality Copper Iron Ore ~85% Future enabling Manganese Crop Nickel Nutrients PGMs 19 Anglo American
Slide 20: Outlook for our products
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style Outlook for our products Duncan Wanblad
Slide 21: De Beers well positioned in a structurally attractive sector
De Beers well positioned in a structurally attractive sector Differentiated position Attractive market fundamentals Leading provenance assurance capability Global GDP growth underpins through TracrTM blockchain steady long-term growth Competitive margins End market diversification for along the valu
Slide 22: Global electrification underpins strong copper demand
Global electrification underpins strong copper demand Copper intensity across light duty powertrains Copper demand for the energy transition from key (kg/vehicle)14 sectors in a 1.5°C scenario (Mt)12 ~50 ~17 ~31 ~15 ~15 ~6 Petrol ICE Diesel ICE FCEV BEV 2020 2040F 22 Anglo American
Slide 23: Robust outlook for PGMs demand
Robust outlook for PGMs demand Hybrids support low carbon transition Balanced demand Global LDV production (million units)15 Platinum demand16 100 % 80 Automotive 35 Jewellery 22 60 Industrial 43 40 20 Platinum industrial demand growth ~6% pa 2020 2025F 2030F over last decade ICE Hybrids BEV F
Slide 24: Premium iron ore is essential for a low carbon transition
Premium iron ore is essential for a low carbon transition Today Transition Future ~90% steel production Higher grade iron ore requires less Significant emission is in a blast furnace17 steelmaking coal reductions possible with a mix of technologies to decarbonise steel by 2050 Direct charge products
Slide 25: High quality steelmaking coal supports the steel industry's low carbon transition
High quality steelmaking coal supports the steel industry’s low carbon transition Blast furnaces to remain a significant share of Our SMC assets are well aligned with the steelmaking mix to 2050 demands of the energy transition Metallics requirements for steel production (%) ~80% premium quality har
Slide 26: Quellaveco ramp-up progressing well
Quellaveco ramp-up progressing well Built on time & budget despite pandemic 2 processing lines: 50% throughput each Both lines expected at full capacity from mid-2023 2022F: 90-100kt at ~140c/lb 2023F: 310-350kt at ~100c/lb 26 Anglo American
Slide 27: Applying Quellaveco's blueprint for successful project development
Applying Quellaveco’s blueprint for successful project development Detailed project Holistic approach to Leveraging our planning sustainability capabilities 4 feasibility studies Community support Experienced project team ~50% detailed engineering Economic benefits One major project at a time Key pe
Slide 28: Woodsmith: Physical progress
Woodsmith: Physical progress Service shaft Mineral transport shaft ~265m ~230m of 1.6km depth of 321m depth Production shaft Mineral transport tunnel Q1 2023 >20km shaft sinking expected of 37km tunnel from mine to port to commence 28 Anglo American
Slide 29: Woodsmith: Developing POLY4 demand
Woodsmith: Developing POLY4 demand Attractive demand fundamentals Accelerated business development Indicative indexed market price19 240 140 120 100 80 2017 2018 2019 2020 2021 2022 Growing demand for sustainable products that: 1,500 commercial scale on-farm demonstrations Reduce GHG emissions • 3
Slide 30: Q&A: Our investment proposition
Q&A Our investment proposition Competitive Differentiated Sustainable assets capabilities returns Strong cost position Technology-led Disciplined capital allocation Long-term growth options Sustainability leader EBITDA margins of 45-50%20 To ask a question: UK +44 20 3481 4247 / Standard dial-in inc
Slide 31: Footnotes
Footnotes 1. Recordable incidents. Data relates to subsidiaries and joint operations over which Anglo American has management control. 2. October year-to-date Total Recordable Injury Frequency Rate per million hours worked. 3. Copper equivalent production is calculated including the equity share of
Slide 32: Appendix
Update image Appendix 32 Rope Shovel Hydrogen at Mogalakwena truck at Mogalakwena
Slide 33: Guidance
Update image Guidance 33 Rope Shovel at Mogalakwena Kolomela
Slide 34: Guidance summary
Guidance summary Earnings Capex¹ Other (numbers in brackets are previous guidance) (numbers in brackets are previous guidance) (numbers in brackets are previous guidance) Volumes See slide 35-36 2022 ~$5.7bn ($6.1-6.6bn) Quellaveco copper project Growth ~$1.7bn ($1.6-2.1bn) Unit costs See slide 37 •
Slide 35: Production outlook
Production outlook Units 2020 2021 H1 2022 2022F 2023F 2024F 2025F (new) Diamonds1 Mct 25 32 17 ~34 30-33 29-32 32-35 (prev. 32-34) (prev. 30-33) Copper2 kt 647 647 273 650-660 840-930 910-1,000 840-930 (prev. 640-680) (prev. 910-1,020) (prev. 910-1,020) Nickel3 kt 44 42 20 ~40 38-40 39-41 37-39 (pr
Slide 36: Production outlook – supplementary guidance
Production outlook – supplementary guidance Units 2020 2021 H1 2022 2022F 2023F 2024F 2025F (new) Chile: ~560 Chile: 530-580 Chile: 550-600 (prev. 560-580) (prev. 590-650) (prev. 590-650) Chile: 530-580 Copper2 kt 647 647 273 Peru: 90-100 Peru: 310-350 Peru: 360-400 Peru: 310-350 (prev. 80-100) (pre
Slide 37: Unit costs performance by Business Unit
Unit costs performance by Business Unit De Beers (US$/ct)1 Copper (C1 USc/lb)2 Nickel (C1 USc/lb)3 Previously Previously ~159c/lb ~495c/lb ~80 ~157 ~156 ~500 ~515 58 ~65 120 377 2021 2022F 2023F 2021 2022F 2023F 2021 2022F 2023F (new) (new) (new) PGMs (US$/PGM oz)4 Iron Ore (FOB US$/t)5 Steelmaking
Slide 38: Capex guidance
Capex guidance Capex1 $bn ~5.7 6.0-6.5 5.5-6.0 5.0-5.5 (prev. 6.1-6.6) (prev. 6.0-6.5, which (prev. 5.6-6.1) excluded Woodsmith) ~0.8 Woodsmith ~0.5 ~0.7 (prev. ~0.6) (prev. 1.5-2.0)3 ~0.7 (prev. 1.2-1.7)3 SA RREE2& ~0.3 ~0.7 SA RREE2& Growth ~1.2 ~0.3 nuGenTM ~0.3 (prev. 1.0-1.5) nuGenTM (prev. ~0.
Slide 39: Life extension capex
Life extension capex Major components of lifex¹ ($bn) Guidance ~0.6 ~0.7 ~0.7 ~0.5 (prev. ~0.7) (prev. ~0.8) (prev. ~0.6) Mototolo – Der Brochen (PGMs) ~0.1 ~0.1 Kolomela (Iron Ore) ~0.2 ~0.2 ~0.2 ~0.2 ~0.3 ~0.3 Venetia (Diamonds) (prev. ~0.3) (prev. ~0.3) 2022F 2023F 2024F 2025F (new) Lifex project
Slide 40: Key projects driving growth capex
Key projects driving growth capex Major components of growth capex¹ ($bn) Guidance ~1.2 ~1.0 ~1.0 ~1.0 (prev. 1.0-1.5) (prev. 1.2-1.7) (prev. 1.5-2.0) + ~0.5 Woodsmith + ~0.8 Woodsmith (prev. ~0.6) ~0.72 ~0.12 Quellaveco2 (Copper) (prev. ~0.6) (prev. ~0.2) ~0.1 ~0.2 ~0.4 (prev. ~0.4) ~0.1 (prev. ~0.
Slide 41: Attractive greenfield and brownfield options
Attractive greenfield and brownfield options Growth capex¹ ($bn) Long life greenfields and fast returning brownfields Capex Volume (pa) From¹ Forecast Returns Payback IRR Margin Quellaveco (Copper) ~$2.8bn2 +300kt2 2022 ~4 years >15% >50% Marine Namibia (Diamonds) $0.2bn3 +0.5Mct3 2022 ~3 years >25%
Slide 42: Technology & innovation will transform the physical footprint of mining
Technology & innovation will transform the physical footprint of mining $0.2–0.5bn pa technology capex to more precisely target metal & mineral with less water, waste & energy Initiative Application Impact Progress • Mogalakwena North Concentrator (PGMs) (~70% of complex feed) and Los Bronces (Coppe
Slide 43: Quellaveco modelling
Quellaveco modelling Fully consolidated with a 40% minority interest Accounting treatment Shareholder loans from minority shareholder consolidated in Anglo American net debt ~330 ave. over first 5 years Production (copper equivalent) (ktpa) ~220 ave. over 36 year Reserve Life1 By-products2 ~5ktpa co
Slide 44: Sustainability summary
Sustainability summary Sustainability twice-yearly update presentations: FutureSmart MiningTM: → For presentations and webinar replays, visit: To deliver on our Purpose, we are changing the way we mine through smart angloamerican.com/investors/investor-presentations innovation across technology, dig
Slide 45: Investor Relations
Investor Relations Paul Galloway paul.galloway@angloamerican.com Tel: +44 (0)20 7968 8718 Emma Waterworth emma.waterworth@angloamerican.com Tel: +44 (0)20 7968 8574 Michelle Jarman michelle.jarman@angloamerican.com Tel: +44 (0)20 7968 1494 45 Reclamation grass Kolomela Drone - De Beers Canada Survey
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