Anglo American Plc · LSE:AAL
Anglo American — Corporate Update (November 2016)
33 slides from Anglo American's corporate update, Nov 21, 2016
Slide 1: Southern Africa Site Visit
SOUTHERN AFRICA SITE VISIT 21st November 2016 Jwaneng mine
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: Welcome and Agenda
WELCOME AND AGENDA Paul Galloway - Monday morning Introduction and business update - Monday afternoon De Beers Global Sightholder Sales - Monday evening De Beers management dinner - Tuesday Jwaneng diamond mine - Tuesday evening Platinum management dinner - Wednesday Mogalakwena mine - Wednesday eve
Slide 4: What You Will See This Week
WHAT YOU WILL SEE THIS WEEK OUR RESOURCES Jwaneng and Mogalakwena: World class RESOURCE endowments support the building of world ENDOWMENT class assets. OUR BUSINESS PROCESSES PEOPLE Operating Model: Provides the structure DRIVING and discipline to build world class operations. COMPETITIVE ADVAN
Slide 5: Commodity Prices
COMMODITY PRICES Indexed commodity prices1 (1 Jan 2016 = 1) Indexed commodity price (1 Jan 2016 = 1) 2016 YTD Var. 1 Jan ‘16 3.6 Vs. 10 Nov ’16 3.4 3.2 Met Coal(2) +249% 3.0 2.8 2.6 2.4 2.2 Iron ore(3) +73% 2.0 1.8 Thermal Coal(4) +52% 1.6 (5) +40% 1.4 Copper +21% 1.2 1.0 Platinum(6) +17% 0.8 Diamon
Slide 6: In Delivery Mode…
IN DELIVERY MODE… • Focus on Resource Potential and Asset Quality. Portfolio • Repositioning to focus on Leading Positions. • Top tier assets in other commodities support cash flow and returns. • Deleveraging to enhance flexibility. Balance Sheet • Dividend the priority once balance sheet strength r
Slide 7: Safety & Environment
SAFETY & ENVIRONMENT Safety: Loss of life and TRCFR(1) SAFETY 20 1.29 1.4 Regrettably, 10 fatalities at end-October 2016. 1.08 1.2 0.93 15 0.8 1 Total recordable injuries rate and lost time injures 1 5 0.72 10 2 0.8 rate continue to improve – down 23% and 19% 2 3 2 0.6 respectively when compared
Slide 8: In Delivery Mode…Key Milestones
IN DELIVERY MODE…KEY MILESTONES Grosvenor decline GAHCHO KUÉ COMMISSIONING • On time and on budget. BARRO ALTO RAMP-UP COMPLETE • Nameplate capacity achieved in Q3. DELIVERY OF GROSVENOR • Ahead of schedule and under budget. MINAS-RIO RAMP-UP PLAN • Step 2 Licence received. • On track for 20
Slide 9: In Delivery Mode…Portfolio Restructuring
IN DELIVERY MODE…PORTFOLIO RESTRUCTURING Number of assets 2016 Key Portfolio Changes 26 assets Rustenburg 70 68 Callide 65 60 Foxleigh 55 Completed 55 sales Niobium & Phosphates 50 Disposal 45 45 Tarmac Middle East 42 40 Kimberley 35 Pandora 30 Sale Announced 25 Dartbrook 20 Thabazimbi 15 Closure 10
Slide 10: In Delivery Mode…Organisation Restructuring
IN DELIVERY MODE…ORGANISATION RESTRUCTURING Employee and contractor numbers Support Operations -41% 162,000 151,000 13,000 128,000 11,500 120,000 10,500 95,500 95,500 8,800 Other Coal Iron ore De Beers Copper Platinum 2013 2014 2015 H1 2016 2016F 2016F 10
Slide 11: In Delivery Mode…The Impact of Change
IN DELIVERY MODE…THE IMPACT OF CHANGE 11
Slide 12: Portfolio Choices Driven by Asset Potential
PORTFOLIO CHOICES DRIVEN BY ASSET POTENTIAL De Beers Platinum Copper Bulks and Other Minerals Jwaneng Mogalakwena Los Bronces Botswana Iron ore • Kumba Orapa Amandelbult Chile and • Minas-Rio Collahuasi manganese • Samancor Venetia • BRPM South Africa South • Voorspoed Africa • Mototol
Slide 13: Capital Allocation
CAPITAL ALLOCATION “Disciplined capital planning to achieve our balance sheet objectives whilst maximising the value of the business” • Strict value criteria applied. • 2016 cost and volume savings of • Syndication considered on major $1.6bn targeted. projects. • Working capital improvement of • No
Slide 14: Delivering Change to Unlock Our Potential
DELIVERING CHANGE TO UNLOCK OUR POTENTIAL 1 Key project delivery: Minas-Rio, Barro Alto, Gahcho Kué and Grosvenor. Repositioning Our Disposal programme continues to drive focus on highest priority assets. Portfolio Restructured with 41% fewer people and 26 fewer assets than 2013. 2 Operating
Slide 15: Redefining Mining Through Operating Best Practice and Innovation
REDEFINING MINING THROUGH OPERATING BEST PRACTICE AND INNOVATION
Slide 16: Operating Model – The Foundation
OPERATING MODEL – THE FOUNDATION Operating Model is our operating and technical platform 3 essential components that are interlinked – initial focus on Work Management but key elements of Operational Planning and Feedback now in place Work Management ensures execution Applying high capabilit
Slide 17: Implementation Well Under Way – Multi-Stage Process
IMPLEMENTATION WELL UNDER WAY – MULTI-STAGE PROCESS Work management continues with operational planning ramping up Project Iron ore Platinum De Beers Copper *WM = Work Management OP = Operational Planning 17
Slide 18: Operating Model – Impact Showing in the Numbers
OPERATING MODEL – IMPACT SHOWING IN THE NUMBERS Jwaneng - live in September 2016 Mining 2013 2016 YTD Mining productivity benefits Productivity already being realised through Shovels Shovel productivity the implementation process 1,427 1,672 (t/hr) well above target Additional productivity benef
Slide 19: Mogalakwena North Concentrator
MOGALAKWENA NORTH CONCENTRATOR Technical Expertise combined with the Tonnes Milled (daily average) Operating Model Implementation (Kt) +26% Operating Model live in December 2015 20.9 21.5 22.6 19.9 18.0 To date it delivered: • 26% increase in tonnage throughput from 2013 2012 2014 2015 Q1 2016 Q
Slide 20: Minas-Rio – Benefits of Stability & Ore Control
MINAS-RIO – BENEFITS OF STABILITY & ORE CONTROL Stability of processing plant and proper ore blending have led to recovery improvements Defining the operating parameters, work management and monitoring have delivered the benefits Mass Recovery (%) Metallurgical Recovery (%) Mass Recovery (%) Met
Slide 21: Focus – Cash Generation
Jwaneng mine FOCUS – CASH GENERATION Delivering our targets
Slide 22: Operating Performance
OPERATING PERFORMANCE In 2014 we highlighted “What good looks like” Mining “What good looks like” Asset Strategy “What good looks like” Drill & blast Mine-to-Plan compliance >90% Delivering Plant OEEs of 90-95% design OEE* Load & haul Payloads consistently at 95-100% of design Maintenance Ac
Slide 23: Los Bronces – End-Value Estimation
LOS BRONCES – END-VALUE ESTIMATION Moving beyond ‘grade only’ to value based ore selection (VBOC) Overview Ore control determines ore destination (flotation, leach, stockpile, waste) Traditional grade control has been based on copper grade only Additional value now realised by taking into acco
Slide 24: Copper Improvement – Recovery Optimisation
COPPER IMPROVEMENT – RECOVERY OPTIMISATION Over 40% improvement in molybdenum recovery Molybdenum Recovery - Plant 2 with a ‘back to good technical basics’ approach, Recovery % +40% focussing on: 49.8 • Process Optimisation 43.0 44.1 35.5 • Process Efficiency Q1 2015 Q2 2015 - Q4 2015-Q1 2016 Q2 2
Slide 25: Pit Slope Optimisation – Mogalakwena Mine
PIT SLOPE OPTIMISATION – MOGALAKWENA MINE Waste reduction $700M increase in Discounted Cash Flow (+22%) over 15 years Additional ore Phase 1 Project increased wall angles from 45 to 50 degrees 5 million tonnes less waste in 2017, and 15% 50o wall reduction over next 15 years Slope design Was
Slide 26: What Does the Future Look Like
WHAT DOES THE FUTURE LOOK LIKE Redefining Mining Polokwane smelter robotics
Slide 27: Redefining Mining Innovation – A Fresh Approach
REDEFINING MINING INNOVATION – A FRESH APPROACH Our opportunity is to aggressively move to leading edge performance with rapid adoption of current / near technologies… Consider entire Open Forums Technology SmartPath value chain Programmes Use multiple Ideate Internal Valued defined Entrepreneurial
Slide 28: Our Open Forum – Collaborative Ideation
OUR OPEN FORUM – COLLABORATIVE IDEATION ~50 themes ~4500 ideas… 9 Programmes Sustainability (Water) Processing Mining Closed loop water system Concentrating the mine Alternate Transport Waterless Separation Modular Plant Modern Mine Smart Intensifiers Swarm Robotic Mining System-Wide Enablers Mining
Slide 29: Step Change in Capital Efficiency - Concentrate the Mine
STEP CHANGE IN CAPITAL EFFICIENCY - CONCENTRATE THE MINE Objective and approach Increase plant throughput by improved ore fragmentation Coarse Mine to Increase the effective head grade - early stage Particle Mill waste rejection Recovery Incorporate coarse particle recovery Early stage waste P
Slide 30: Concentrate the Mine – Advanced Mine to Mill
CONCENTRATE THE MINE – ADVANCED MINE TO MILL Approach Applying advanced blasting techniques • High energy explosives (VOD ~6000 m/s) • Short inter-hole delay timing to increase explosive energy interaction • Detailed timing sequence to encapsulate blast volume and buffer vibration levels • 25% imp
Slide 31: Concentrate the Mine – Coarse Particle Recovery
CONCENTRATE THE MINE – COARSE PARTICLE RECOVERY Approach Las Tortolas Employing new technology to coarsen the grind size while maintaining recovery Indicative results of modified process Reduce grinding energy by 20-30% Reduce conventional tailings volume to 20% and water make up to 30% Unlo
Slide 32: Our Aspiration – Towards Dry Tailings
OUR ASPIRATION – TOWARDS DRY TAILINGS El Soldado tailings dam Water efficiency is a step-change opportunity Efficiency enables increased throughput Improves expansion opportunities to develop new mines in water-stressed areas Reduces safety and environmental risks Two approaches 1) Create less
Slide 33: Questions
QUESTIONS