MMG Ltd. · HKEX:1208
MMG — Investor Presentation (April 2015)
13 slides from MMG's investor presentation, April 2015
Slide 1: Market outlook
Market outlook Marcelo Bastos - Chief Operating Officer April 2015
Slide 2: Important Information
Important Information The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part,
Slide 3: Introduction
Introduction Refined copper consumption > MMG’s growth strategy targets base metals – predominantly zinc and copper. > Base metals enable developing countries 45% to grow and modernise. 55% > China continues to grow as the largest global consumer of copper and zinc. > Both copper and zinc have a str
Slide 4: Copper – short term drivers of demand
Copper – short term drivers of demand Copper Copper > Price decline in 1Q15 not supported by tonnes US$/lb any change in market fundamentals. 800,000 4.00 > Quiet trading period leading up to Chinese New Year. 600,000 3.50 > Emerging global macroeconomic news flow has impacted market sentiment. > Ch
Slide 5: Copper – long term drivers of demand
Copper – long term drivers of demand > Global demand growth expected to increase 4% YoY between 2013 and 2020. > Long term demand growth is highly leveraged to the continued industrialisation of China. > China is expected to account for 47% of global demand in 2020. Global copper consumption growth
Slide 6: Copper – short term supply factors
Copper – short term supply factors 2017 Forecast annual production > Copper metal stocks are expected to increase 6% in 2015. Escondida Cerro Verde > Unexpected short-term disruptions continue to impact supply. Las Bambas > Tax and political reforms are influencing Collahuasi production decisions. A
Slide 7: Copper – long term supply factors
Copper – long term supply factors > Availability of power and water is a serious issue for the industry. > Grade decline continues globally. > Availability of project finance is expected to limit greenfield projects and brownfield expansions. > Capital and operating cost inflation will impact future
Slide 8: Zinc – short term drivers of demand
Zinc – short term drivers of demand Zinc – first use Miscellaneous 2% > Price decline in 1Q15 not supported by any change in market fundamentals. Oxides & chemicals 9% > Sentiment is also influencing markets. Die casting alloys 14% > Global refined zinc consumption is Galvanising Brass semis & 59% e
Slide 9: Zinc – long term drivers of demand
Zinc – long term drivers of demand > The urbanisation and industrialisation of Global Auto Production Growth 2014-2022 China will result in a continuing increase 110 in per capita zinc production. 107 > Zinc’s first use of galvanising and final 20 million Cars produced annually (millions) 100 use in
Slide 10: Zinc – short term supply factors
Zinc – short term supply factors > Century’s closure in 3Q15 will remove approximately 0.5 million tonnes from a 13.2 million tonne concentrate market. > This is in addition to other mine closures which have already removed a further 0.5 million tonnes from the concentrate market in 2015. > Small mi
Slide 11: Zinc – long term supply factors
Zinc – long term supply factors > New mine production will be required to meet growing demand and offset mine closures. > Zinc assets have experienced historically low returns – this has influenced exploration and development decisions. > New capacity is expected to be small and project finance will
Slide 12: Summary
Summary > MMG’s outlook remains positive on the demand growth from China in base metals commodities. > China’s rate of growth is slowing but the economy is still growing from a very large base. > Base metals are a critical element in China’s pursuit of continuing urbanisation and industrialisation.
Slide 13: We mine for progress
WE MINE FOR PROGRESS