Anglo American Plc · LSE:AAL
Anglo American — Fertiliser Latino Americano 2013
22 slides from Anglo American's conference presentation, Jan 22, 2013
Slide 1: Brazilian Phosphate Fertiliser Market Trend
BRAZILIAN PHOSPHATE FERTILISER MARKET TREND Fertiliser Latino Americano 2013 - Sao Paulo 20-22 January 2013 Ruben Fernandes – CEO, Niobium and Phosphates
Slide 2: Disclaimer: Certain Forward-Looking Statements
DISCLAIMER: CERTAIN FORWARD-LOOKING STATEMENTS Certain statements made in this presentation constitute forward-looking statements. Forward looking statements are typically identified by the use of forward-looking terminology such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'intends',
Slide 3: Our ambition is to be the leading global mining company
OUR AMBITION IS TO BE THE LEADING GLOBAL MINING COMPANY, BECOMING THE INVESTMENT, PARTNER AND EMPLOYER OF CHOICE Anglo American Portfolio Other Mining Nickel Metallurgical Coal and Industrial Platinum Thermal Coal Iron Ore and Diamonds Copper Manganese Copebras is now Anglo American’s Phosphates bus
Slide 4: Agenda: Brazilian Market Trends
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 5: Key market drivers for food demand and biofuels indicate sharp expansion
KEY MARKET DRIVERS FOR FOOD DEMAND AND BIOFUELS INDICATE A SHARP EXPANSION OF GLOBAL NEEDS World population % Urbanisation rate bn 8 9 Population 6 3 4 growth & urbanization 1950 1975 2000 2025 2050 <35 37 47 58 <60 GDP growth rates % 10 5 4 4 4 5 5 5 Economic 7 6 6 6 7 7 7 5 growth 3 2 2 3 3 3 0 2
Slide 6: Brazil seen as a powerhouse and key strategic partner
UNDER THIS CONTEXT, BRAZIL IS SEEN AS A POWERHOUSE AND A KEY STRATEGIC PARTNER... Brazil enjoys high national rainfall rates... ... and extensive water resources One of world's highest rainfall Little or no indices water scarcity Brazil has strong biomass production potential... ... with one of the
Slide 7: Major crops in Brazil growing faster than world production
…WITH MAJOR CROPS IN BRAZIL GROWING CLEARLY FASTER THAN WORLD PRODUCTION Soy production in Brazil expected to Corn production in Brazil expected Sugar production in Brazil grow almost twice as fast as in the to grow twice as fast as in the expected to grow four times world (5% vs 3% p.a.) world (4%
Slide 8: … and should drive fertiliser demand up
… AND SHOULD DRIVE FERTILISER DEMAND UP Brazilian agricultural sector by far fastest ...and expected to increase to 5% p.a. from 2011 growing in the world and … to 2017, accounting for 12% of global demand Index 2004-06 = 100 Global and Brazilian fertiliser demand (2010 -2017) 160 Mt P2O5 Brazil CAG
Slide 9: Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 10: Positive scenario fostering new phosphates projects to reduce import gap
THE POSITIVE SCENARIO IS FOSTERING NEW PHOSPHATES PROJECTS AIMING TO REDUCE THE CURRENT NATIONAL GAP WITH IMPORTS Brazil represents 9% of world’s ...and will due to national undersupply remain a demand, but only 5% of supply... fertiliser importer Brazilian’s share of global Brazilian demand/supply
Slide 11: Challenges to Deliver the Projects
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 12: Challenges for expansion projects are increasing and more complex
HOWEVER, THE CHALLENGES FOR EXPANSION PROJECTS ARE INCREASING AND GETTING MORE COMPLEX ON OUR CURRENT ENVIRONMENT Capital Restrictions EPCM – Eng., Procurement and Construction Management • Strategic divestments and reallocation of capital • Cost Inflation - averaging roughly 5–7% in the last 10 yea
Slide 13: Upward cost trend impacted by uncontrollable macro indicators
THERE IS AN UPWARD TREND COST IMPACTED BY UNCONTROLLABLE MACROINDICATORS... .. the unemployment rate declining and the average wage rising sustain the upward trend on workforce cost... Brazilian Unemployment Rate (%) Annual Average Real Wage Growth (%) Brazil 4,0% 3,8% World 9,8% 4 3,2% 3,4% 10 9,1%
Slide 14: Brazilian Market Trends
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 15: Fertiliser consumption growing faster in the North; new agricultural frontier
BRAZIL FERTILISER CONSUMPTION IS GROWING FASTER IN THE NORTH AND A NEW AGRICULTURAL FRONTIER IS COMING OUT Domestic Fertiliser Consumption (last 10 years)1 • North Region presents the highest growth Fertiliser Consumption - Mt 1,18 1,74 • Its participation on 1,85 fertiliser demand 29,42 have been r
Slide 16: Technology development has enabled Brazil to have 2 crops/year
TECHNOLOGIES DEVELOPMENT HAS ENABLED BRAZIL TO HAVE 2 CROPS/YEAR New technologies and better expertise have been raising the productivity of the mini Changing Brazilian scenario, crops with the “plantio direto” system therefore fertiliser dynamics Mini corn crop % of total Productivity mini corn cro
Slide 17: NPK distributor sector is also facing important changes
NPK DISTRIBUTOR SECTOR IS ALSO FACING IMPORTANT CHANGES Phosphate Industry Chain Blenders Sector Trend Mining Fertilisers • Market share of regional blenders falling Acid Plants Blenders Farmers Operation Plants year by year Integrated Producers Regional • Decrease number of blenders: 100 today Non
Slide 18: Anglo American Phosphates
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 19: Anglo American Phosphates is investing to meet fertiliser demand growth in Brazil
ANGLO AMERICAN PHOSPHATES IS INVESTING TO MEET FERTILISER DEMAND GROWTH IN BRAZIL Anglo American Phosphate is very well located to meet ..and Anglo has also a relevant project to duplicate Brazilian Fertiliser demand at a competitive cost... the phosphate rock capacity at Catalão site Ouvidor – GO M
Slide 20: Conclusions
Brazilian Phosphate Fertiliser Demand – Strong and Positive Fundamentals Brazilian Phosphate Fertiliser Supply – Focusing on Reducing Imports Challenges to Deliver the Projects Brazilian Market Trends Anglo American Phosphates Conclusions
Slide 21: Conclusions
CONCLUSIONS Agriculture Brazil plays a There are still positive crucial market challenges on environment role expanding Interdependent Fertilizer Value chain • Value chain integrants need to work together to: - Overcome the Brazilian challenges Producers Blenders Farmers - Support the country to ach
Slide 22: Thank you
THANK YOU