South32 Ltd. · ASX:S32
South32 — Bank of America Merrill Lynch Global Metals, Mining & Steel Conference 2018
16 slides from South32's conference presentation, May 15, 2018
Slide 1: Bank of America Merrill Lynch Global Metals, Mining & Steel Conference Presentation 2018
15 May 2018 South32 Limited (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX / LSE / JSE Share Code: S32 ADR: SOUHY ISIN: AU000000S320 south32.net BANK OF AMERICA MERRILL LYNCH GLOBAL METALS, MINING & STEEL CONFERENCE PRESENTATION 2018 South32 Limited (ASX, LSE
Slide 2: Bank of America Merrill Lynch Global Metals, Mining & Steel Conference 15 May 2018
• Bank of America Merrill Lynch • Global Metals, Mining & Steel Conference • 15 May 2018
Slide 3: Important Notices
Important Notices • This presentation should be read in conjunction with the “Financial results and outlook – Half year ended 31 December 2017” announcement released on 15 February 2018, which is available on South32’s website (www.south32.net). FORWARD-LOOKING STATEMENTS • This presentation contain
Slide 4: Overview
Overview Consistently apply Sustainably improve Capture margin from our strategy performance higher prices Further simplify our Continue to embed business, establishing Maintain capital discipline high quality options a platform for growth SLIDE 3
Slide 5: Operational performance
Operational performance Production guidance(a) (South32’s share) Worsley Alumina Australia Manganese – Ore Refineries expected to approach guidance FY18 guidance increased at Australia Manganese Brazil Alumina Worsley Alumina hydrate conversion rates expected South Africa Manganese – Ore2 by 6% and
Slide 6: Margins have expanded for our key commodities
Margins have expanded for our key commodities Margin transferring upstream into Capturing margin in Australia Manganese as the net long alumina position South African cost curve steepens Worsley Alumina Australia Manganese ore 44% Alumina 285 354 575 manganese 2.51 5.96 7.39 price price 35% 37% 66%
Slide 7: Alumina market update
Alumina market update FY18e Group alumina and aluminium operations FY18e alumina book Alumina price – Platts FOB Australia (US$/t) 5% Negotiated 800 Price reaction to supply disruptions 10% LME aluminium linkage(a) and potential trade restrictions highlight the tight market balance 700 M-1 alumina i
Slide 8: Manganese market update
Manganese market update China Mn demand in alloy and domestic supply • Manganese ore price Prices increase following stronger steel (Mt ore, 40% Mn) • (US$/dmtu; Mt) demand. Supply slow to respond with structurally lower Chinese production 25 100% and temporary logistic challenges for Increasing sup
Slide 9: Appin colliery restart plan
Appin colliery restart plan Appin colliery restart plan on track Plan view of Appin colliery and West Cliff workings Phase IIII Phase Phase III Safe commencement of staged ramp-up Focus on gas drainage and Ability to safely return operation to Appin Area 9 ventilation historical levels of production
Slide 10: Illawarra Metallurgical Coal guidance
Illawarra Metallurgical Coal guidance Production Production (kt) 8,366 • Recovery to more than 6Mt in FY19 7,073 >6,000 4,100 • Anticipated return to historical rates above 8Mtpa from H2 FY20 FY16 FY17 FY18e FY19e • Progressive return from one to six development units Development (km) Operating unit
Slide 11: South Africa Energy Coal separation update
South Africa Energy Coal separation update May H1 18-24 Manage as a stand-alone business 2018 Commence process to broaden & transform ownership FY19 Target divestment months South Africa Energy Coal Core African operations South Africa Mozal Aluminium • 35% of employees and Energy Coal contractors9
Slide 12: Our portfolio and exploration footprint
Our portfolio and exploration footprint Increasing our greenfield Copper Concept exploration budget Polymetallic Early Stage Nickel Advanced Trilogy Metals Zinc South32 operation Arctic EMX FY18e FY19e Bornite Riddarhyttan US$25M US$40M Arizona Mining Hermosa - Taylor Advance and cycle Equity invest
Slide 13: Capital management framework
Capital management framework Remains unchanged since listing Quarterly net cash movements and shareholder returns (US$M) •Capital management • Net cash12 as ROIC program outstanding11 •at 31 March 700 600 US$433M US$1.9B Competition for excess capital - Investment in the business 500 - Acquisitions
Slide 14: Summary
Summary Consistently apply Sustainably improve Capture margin from our strategy performance higher prices Further simplify our Continue to embed business, establishing Maintain capital discipline high quality options a platform for growth SLIDE 13
Slide 15: Footnotes
Footnotes Notes: 1. 8% of South Africa Energy Coal is owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium. The interests owned by the B-BBEE consortium were acquired using vendor finance, with the loans repayable to South32 via distributions attributable to these parties, pro rata
Slide 16: Footnotes
Footnote SLIDE 15
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