Anglo American Plc · LSE:AAL
Anglo American — Jefferies Copper & Base Metals Summit 2019
28 slides from Anglo American's conference presentation, 2019
Slide 1: Jefferies Copper & Base Metals Summit
JEFFERIES COPPER & BASE METALS SUMMIT Ruben Fernandes - Base Metals CEO Los Bronces 1
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: Asset Quality Focus
ASSET QUALITY FOCUS Diamonds Copper World leader Quality growth 55% mining EBITDA margin 44% mining EBITDA margin PGMs Bulks World leader Quality products 38% mining EBITDA margin 47% mining EBITDA margin 3
Slide 4: Well Positioned for Our Next Transformation
WELL POSITIONED FOR OUR NEXT TRANSFORMATION Competitive Sustainable Differentiated Average quality adjusted cost curve position Net debt:EBITDA Cu Eq growth3 2018-2023 ~20-25% 1.2x 47% Peer range ~15% 36% Peer range 34% Peer range 0.3x ~5% 0.2x Anglo Peers1 Anglo Peers2 Anglo Peers2 4
Slide 5: A World Class Copper Business
A WORLD CLASS COPPER BUSINESS Collahuasi 5
Slide 6: Our Copper Portfolio
OUR COPPER PORTFOLIO Collahuasi Los Bronces Quellaveco 3rd ~55Mt Q1 Largest endowment in the world Contained Cu in Mineral Resources4* Cost curve position 105c/lb 370kt 30 year C1 unit cost 2018 production Reserve Life5 6 *Due to the uncertainty that may be attached to some Inferred Mineral Resource
Slide 7: A World Class Copper Business
A WORLD CLASS COPPER BUSINESS A transformed business ~630-660kt 2019 production guidance Q2 C1 unit cost: Lowest since 2010 with more to come… Portfolio strength ~1Mtpa Production ~120c/lb Future C1 unit cost (post Quellaveco) Organic growth delivered from Disciplined growth Quellaveco & optionality
Slide 8: A Transformed Business Offering Organic Growth
A TRANSFORMED BUSINESS OFFERING ORGANIC GROWTH High quality, long life assets4 Growth in quality volumes Estimated Contained Copper (Mt) 29 Copper production (kt)6 1,400 +50% 9 8 1,200 Ore Reserves 1,000 800 52 At the very start of 600 its resource journey 400 16 6 200 Collahuasi Los Bronces Quellav
Slide 9: Quality Growth
AngloAmerican QUALITY GROWTH Real Mining. Real People. Real Difference.
Slide 10: Value Accretive Growth for Our Shareholders
VALUE ACCRETIVE GROWTH FOR OUR SHAREHOLDERS Growth in... quality volume margins returns within disciplined capital allocation framework 10
Slide 11: Quellaveco: A World Class Copper Project
QUELLAVECO: A WORLD CLASS COPPER PROJECT Meaningfully de-risked Focus on execution Attractive returns Successfully syndicated a All key permits in place & Low cost with significant well understood ore body significant early works further potential Implied NAV Payback EBITDA margin $2.7bn 4 years >50
Slide 12: Collahuasi: Significant Expansion Potential
COLLAHUASI: SIGNIFICANT EXPANSION POTENTIAL A high quality, long-life asset Our 44% share: Incremental production from 2024 +80 ktpa Capex $0.9-1.1bn Margin >50% With further expansion optionality 12
Slide 13: Los Bronces Underground: Sustainable Growth
LOS BRONCES UNDERGROUND: SUSTAINABLE GROWTH Unique design credentials unlocking a significant endowment with competitive returns Sustainable design No impact on glaciers ~150ktpa Incremental production7 No impact on nature reserve ~3bn tonnes No increase in water consumption ~125c/lb Inferred Minera
Slide 14: Technology & Innovation
TECHNOLOGY & INNOVATION Bulk sorter, El Soldado14
Slide 15: Step-Change in Performance & Sustainability
STEP-CHANGE IN PERFORMANCE & SUSTAINABILITY P101 Operating Model Exceeding industry best-in-class equipment & process performance FutureSmart Technical change MiningTM Game-changing technology; data analytics; sustainability Incremental improvement Step-change 15
Slide 16: Innovating to Drive Step-Change
INNOVATING TO DRIVE STEP-CHANGE Bulk sorting Coarse particle flotation 5% higher grade 20% higher throughput 25% higher throughput 85% more water recovery lower costs & energy lower costs & energy 16
Slide 17: A Copper Business Set for the Future
A COPPER BUSINESS SET FOR THE FUTURE FutureSmart MiningTM Energy Water Costs Contributing to Group One step closer to a waterless Lower operating costs energy targets mine Electricity 100% renewables Bulk ore sorting implementation Reduction in mine certified from 2021 in Chile at Los Bronces equipm
Slide 18: Investment Proposition
INVESTMENT PROPOSITION “Leading capabilities actively improving a world-class asset base to drive sustainable, competitive returns” Assets Capabilities Returns Focus on quality Operating Model Capital discipline Long life FutureSmart MiningTM Dividend payout ratio Technology & Sustainability Low cos
Slide 19: Footnotes
FOOTNOTES 1. Source: Wood Mackenzie; AAP; De Beers; CRU. Includes non-AA mined commodities (e.g. zinc, bauxite). Excludes non-mining activities (e.g. petroleum, alumina/aluminium processing, marketing). 2. Peer range: leverage based on 2018. Growth based on data from external advisors. 3. Copper equ
Slide 20: Appendix
AngloAmerican APPENDIX ». ’Quellaveco. Real Mining. Real People. Real Difference.
Slide 21: Copper Market Outlook
COPPER MARKET OUTLOOK Supply Short term demand 1 Market is in ‘risk-off’ mood Limited new supply options • China remains main driver for demand, with economy • Few new porphyry deposits in major transition – fiscal/monetary policy influence • Capital intensity and capital constraints • Headline news
Slide 22: Los Bronces – Significant Growth Optionality
LOS BRONCES – SIGNIFICANT GROWTH OPTIONALITY Current state Growth options Future state Production1 Production • Abundant high grade ore Los Bronces ~370 kt Underground • Permit submitted Q1 2019 400-500ktpa C1 Cost1 • Reduced mine interference C1 Cost Synergies ~$1.45 / lb with Andina • Increased ex
Slide 23: Longer Term Growth Options
LONGER TERM GROWTH OPTIONS Sakatti Los Bronces District • Located in Finnish Lapland, in an established • Located adjacent to proven production assets mining district, close to infrastructure • Synergies with existing infrastructure • Smaller high grade ore body • Attractive mineralisation • Pre-fea
Slide 24: Prospective Districts in Diversified Geographies
PROSPECTIVE DISTRICTS IN DIVERSIFIED GEOGRAPHIES Brazil Cu-Au >22,000km2 granted & under application. Sakatti Chidliak Zambia Cu-Co Arizona >10,000km2 granted (Zambezi West) Ecuador Brazil Zambezi West Quellaveco Angola Mt Isa South & Diamantina Australia Cu Los Bronces Mogalakwena >10,000km2 grante
Slide 25: Guidance & Earnings Sensitivities
GUIDANCE & EARNINGS SENSITIVITIES Production (kt)1 C1 unit costs (c/lb) 579-650 668-650 645-650 650-650 620-650 134 135 135-140 2017 2018 2019F 2020F 2021F 2018 H1 2019 2019F Earnings sensitivity (H1 20192) based on 10% movement in price 30 June spot Average realised EBITDA ($m) Copper (c/lb)2 271 2
Slide 26: Quellaveco Financial Modelling
QUELLAVECO FINANCIAL MODELLING Ownership Anglo American 60%, Mitsubishi 40% Accounting treatment Fully consolidated with a 40% minority interest Shareholder loans from minority shareholder to be consolidated in Anglo American Group net debt Project capex (nominal) $5.0-5.3 billion (100% basis - Angl
Slide 27: Quellaveco Financial Modelling
QUELLAVECO FINANCIAL MODELLING • Anglo American consolidates 100% of Quellaveco’s P&L and Balance Sheet. • Mitsubishi’s 40% share is shown as a non-controlling interest. • After the initial $0.8bn equity injection by Mitsubishi, the project is expected to be funded 60:40 through shareholder debt. •
Slide 28: Water Is a Strategic Imperative
WATER IS A STRATEGIC IMPERATIVE Recent, intense Chilean droughts ... coupled with water licensing constraints Annual series of Central Chile regional precipitation index1 RPI (%) Droughts, defined as years with RPI < 80% DROUGHT 220 200 180 160 140 120 110 80 60 40 20 0 1910 1920 1930 1940 1950 1960
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