South32 Ltd. · ASX:S32
South32 — BofA Securities Global Metals, Mining & Steel Conference 2024
51 slides from South32's conference presentation, May 14, 2024
Slide 1: Strategy and Business Update
14 May 2024 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 STRATEGY AND BUSINESS UPDATE South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) is pleased to provide the
Slide 2: Strategy and Business Update
STRATEGY AND BUSINESS UPDATE 14 May 2024
Slide 3: Important Notices
IMPORTANT NOTICES • This presentation should be read in conjunction with the “Financial Results and Outlook – half year ended 31 December 2023” announcement released on 15 February 2024, which is available on South32’s website (www.south32.net). • FORWARD-LOOKING STATEMENTS • This presentation conta
Slide 4: Overview
OVERVIEW Our purpose is to make a difference by developing natural resources, improving people’s lives now and for generations to come. We are trusted by our owners and partners to realise the potential of their resources We have transformed our portfolio toward commodities critical for the Add imag
Slide 5: Our Strategy
OUR STRATEGY Our purpose is underpinned by a simple strategy UNLOCK OPTIMISE the full value of our business IDENTIFY through our people, our business by working innovation, projects and and pursue opportunities to safely, minimising our impact, technology sustainably reshape our consistently deliver
Slide 6: Our Sustainability Approach
OUR SUSTAINABILITY APPROACH We are committed to continuously improving our sustainability performance Protecting and Delivering value Operating ethically Managing our Addressing respecting our people to society and responsibly environmental impact climate change Our FY24 focus areas Our third-party
Slide 7: Delivering on Our Strategy
DELIVERING ON OUR STRATEGY Our exposure to commodities critical for a low-carbon future is >85%(a) and growing Added copper and doubled our Exited lower returning, Growing our zinc and copper volumes low-carbon aluminium6 capacity capital intensive businesses through high-quality development project
Slide 8: Our Portfolio
OUR PORTFOLIO An attractive commodity mix and growth pipeline in commodities critical for a low-carbon future Cerro Matoso Australia Manganese Ambler Metals JV MRN Bauxite Cannington Brazil Alumina Worsley Alumina Sierra Gorda Mozal Aluminium Hermosa Brazil Aluminium South Africa Manganese Hillside
Slide 9: Our Capital Management Framework
OUR CAPITAL MANAGEMENT FRAMEWORK Our unchanged capital management framework supports investment in our business and is designed to reward shareholders as our financial performance improves Capital management framework Capital allocation since FY16(a) Shareholder returns(b) (US$M) (US$M) US$5.6B retu
Slide 10: Our Balance Sheet
OUR BALANCE SHEET A strong balance sheet is at the core of our strategy March 2024 pro-forma net cash/(debt) (US$M) We prioritise an investment grade credit rating through all cycles 1,010 73 • Our liquidity position remains strong, with US$0.9B cash9 and an undrawn US$1.4B sustainability-linked rev
Slide 11: Our Base Metals Business
OUR BASE METALS BUSINESS Base and precious metals production across copper, zinc, lead, silver and nickel, and a portfolio of growth options Sierra Gorda copper AMBLER METALS JV (50%) Copper, Zinc, Lead & Silver • Large scale, long-life open-cut mining and processing plant, producing copper and moly
Slide 12: Our Hermosa Project
OUR HERMOSA PROJECT A regional scale project with the potential to produce critical commodities across multiple deposits for decades, underpinned by Taylor as the first development stage Hermosa land package Patented Unpatented • Potential top 10 global zinc producer13 with an initial Taylor deposit
Slide 13: Our Aluminium Value Chain Business
OUR ALUMINIUM VALUE CHAIN BUSINESS A leading integrated position producing more than 1.1Mt of aluminium and 5.3Mt of alumina Unlocking value from our first quartile alumina refineries16 • Integrated bauxite mines and alumina refineries in Australia and Brazil, supplying our own smelters and export m
Slide 14: Our Manganese Business
OUR MANGANESE BUSINESS A large, high-quality manganese ore business and a unique opportunity to produce locally sourced battery-grade material for North American markets Australia Manganese • The GEMCO open-cut mine is one of the largest, lowest cost operations in the world18, sitting close to impor
Slide 15: Our Growth Pipeline
OUR GROWTH PIPELINE Growing our base metals production through our high-quality development projects and pipeline of options Copper equivalent production19 Under Feasibility Projects in further study phases and exploration construction study ~45%(a) Hermosa Hermosa Sierra Gorda Cerro Matoso Chita Va
Slide 16: Our Commodity Mix
OUR COMMODITY MIX Our key commodities are benefitting from a combination of short-term dynamics and long-term structural tailwinds in the transition to a low-carbon world EBIT sensitivities Spot (6 May 2024) vs. Key drivers in a low-carbon world +/- 10% (US$M)(a) H1 FY24 average index prices 0% 5% 1
Slide 17: Summary
SUMMARY With the sale of Illawarra Metallurgical Coal, our business is simpler and focused on commodities critical for a low-carbon future. We will have a streamlined portfolio, a stronger balance sheet, and are unlocking further value from our base metals development projects and growth options We
Slide 18: Markets Outlook
MARKETS OUTLOOK
Slide 19: Aluminium Market
ALUMINIUM MARKET With China’s smelting capacity expected Long-term demand growth expected Attractive long-term price outlook to be capped at 45Mt, the rest of the to be driven by transport, packaging supported by higher cost inducement world is required to invest in new and the low-carbon energy tra
Slide 20: Alumina Market
ALUMINA MARKET Over the past decade, growing Chinese dependence Inducement cost projects expected to be built ex-China due to on imported bauxite has shifted new refinery capacity from China’s declining bauxite self-sufficiency and environmental policy inland to coastal regions and ex-China (such as
Slide 21: Copper Market
COPPER MARKET Strong long-term demand outlook supported by renewable Projected primary demand and production gap by 2040e equivalent energy additions and rising electric vehicle (EV) penetration to requiring an additional ~1Mt of copper production each year Copper total demand Total mine production
Slide 22: Zinc Market
ZINC MARKET Growing demand in transport, consumer, Global supply will be constrained by a lack Primary demand growth expected to outpace industrial and renewables sectors of new discoveries, falling grades and rising production by ~3Mt to 2032, an industry with rising intensity of use environmental
Slide 23: Supplementary Information
: — 8, SUPPLEMENTARY INFORMATION Ne ees ee
Slide 24: Working Safely
WORKING SAFELY Our belief is that we all guarantee everyone at South32 goes home safe and well H1 FY24: 0 • Nothing is more important than the health, safety and wellbeing of Fatalities20,21 FY23: 2 our people FY22: 1 • Continuing to implement our multi-year Safety Improvement Program H1 FY24: 2.0 a
Slide 25: Inclusion and Diversity
INCLUSION AND DIVERSITY We are committed to building and maintaining an inclusive culture and diverse workforce H1 FY24: 50.0% • Achieved 50% representation of women on our Board and Women24 on our Board FY23: 44.4% Lead Team FY22: 37.5% H1 FY24: 20.7% • Delivered sustained improvement across most o
Slide 26: Sale of Illawarra Metallurgical Coal
SALE OF ILLAWARRA METALLURGICAL COAL The sale of Illawarra Metallurgical Coal for up to US$1,650M28 will unlock significant value, simplify our business and lower our sustaining capital intensity Less complexity Lower capital intensity Reduced Scope 3 exposure(b) Employee headcount29 Group historica
Slide 27: Capital Expenditure Outlook
CAPITAL EXPENDITURE OUTLOOK Lowering our sustaining capital intensity Unlocking value from our operations Growing our base metals production Safe & reliable capital expenditure30,(a) Improvement & life extension capital expenditure30,(a) Growth capital expenditure (US$M per annum) (US$M per annum) (
Slide 28: Sierra Gorda Copper
SIERRA GORDA COPPER Sierra Gorda has improved our portfolio and embedded options for further copper growth Sierra Gorda Mineral Resource (looking south-southwest) Near-term production growth • Completed the capital efficient plant de-bottlenecking project, delivering plant throughput of ~48-49Mtpa (
Slide 29: Hermosa Project - Taylor Deposit
HERMOSA PROJECT - TAYLOR DEPOSIT Taylor is expected to improve our portfolio, deliver attractive returns and unlock further value as the first phase of our regional scale opportunity Taylor construction underway • A long-life, low-cost15, low-carbon31 zinc-lead-silver operation, with expected first
Slide 30: Hermosa Project - Near Mine Exploration Potential
HERMOSA PROJECT - NEAR MINE EXPLORATION POTENTIAL Exploration results support the potential for further resource growth and copper production from the nearby Peake prospect Peake prospect (looking north-east) Exploration results indicate the potential for a continuous system connecting Taylor Deeps
Slide 31: Hermosa Project - Clark Deposit
HERMOSA PROJECT - CLARK DEPOSIT Clark is ideally positioned as the only advanced project with the potential to provide a fully integrated, domestic source of battery grade manganese for the North American EV supply chain Taylor and Clark Deposits (looking south-west) A significant Mineral Resource w
Slide 32: Hermosa Project - Exploration Land Package
HERMOSA PROJECT - EXPLORATION LAND PACKAGE A highly prospective land package with the potential for future discoveries Hermosa high priority corridor Patented Regional exploration land package Unpatented • Our highly prospective regional land package represents a third source of value at Hermosa Pro
Slide 33: Worsley Alumina
WORSLEY ALUMINA Bauxite mining areas Unlocking high-quality bauxite mining areas and further improving the operation’s first quartile carbon intensity37 N New mining areas • Worsley Mine Development project will unlock additional high-quality bauxite, which is expected to underpin our mining operati
Slide 34: Our Future Growth Through Discovery
OUR FUTURE GROWTH THROUGH DISCOVERY Progressing a pipeline of exploration prospects in targeted regions as we work to discover our next generation of base metals mines Our strategy has generated 25+ exploration programs across Expect to spend ~US$65M(a) in FY24e to prospective base metals options ou
Slide 35: Our Exploration Portfolio in Argentina
OUR EXPLORATION PORTFOLIO IN ARGENTINA We have consolidated our position in the San Juan region, Argentina, establishing a low-cost entry to an emerging copper district with substantial exploration upside San Juan province, Argentina Leonor Regalito We have invested in greenfield exploration options
Slide 36: Footnotes
FOOTNOTES 1. This figure represents the potential copper equivalent production growth from the development of the Taylor deposit at our Hermosa project and the fourth grinding line expansion project at Sierra Gorda, compared to FY23 production volumes from Cannington, Cerro Matoso and Sierra Gorda.
Slide 37: Footnotes
FOOTNOTES 24. “Women” are defined as employee headcount with a sex of “Female”. 25. Operations Leadership Team is defined as all members of an Operations Lead Team. Functional membership is limited to one per function and must be site based. 26. Generic term meaning Africans, Coloureds and Indians w
Slide 38: South32
SOUTH32
Slide 39: Annexure 1: JORC Code Table 1: Flux Exploration Results
Annexure 1: JORC Code Table 1: Flux Exploration Results The following table provides a summary of important assessment and reporting criteria used for the reporting of Exploration Results for the Flux prospect, which forms part of the Hermosa Project located in South Arizona, USA (Figure 1). Section
Slide 40: JORC Table 1: Sub-sampling techniques
Criteria Commentary • Geologic and geotechnical logging is recorded on a tablet with inbuilt quality assurance and quality control (QA/QC) processes to minimise entry errors before synchronising with the site database. • Logging is completed to an appropriate level to support assessment of Explorati
Slide 41: JORC Table 1: Verification of sampling and assaying
Criteria Commentary • The nature and quality of assaying and laboratory procedures are appropriate for supporting the disclosure of exploration results. Verification of • Core photos of the entire hole are reviewed by geologists to verify significant sampling and intersections and to finalise the ge
Slide 42: JORC Table 1: Reporting of Exploration Results
Criteria Commentary • Recent changes for all Hermosa drill samples have been implemented to improve performance of the duplicate samples by increasing the size of sub-sample splits and pulverising volumes to produce a more representative sample. Section 2 Reporting of Exploration Results (Criteria l
Slide 43: JORC Table 1: Geology and drill hole information
Criteria Commentary o Carbonate replacement deposit (CRD) style zinc-lead-silver base metal sulphides (Taylor-like) o Quartz and base metal vein mineralisation • The Flux prospect is located down-dip of a historic mining area that has the potential for carbonate hosted, zinc, lead, silver mineralisa
Slide 44: JORC Table 1: Further work and Competent Person Statement
Criteria Commentary • Quality control of geophysical data includes using a third-party geophysical consultant to verify data quality and provide secondary inversions for comparison to Quantec interpretations. Further work • Planned elements of the exploration strategy include follow-up drilling, ori
Slide 45: Figure 1: Regional location plan
Figure 1: Regional location plan Strategy and Business Update 2024 – Flux Exploration Results
Slide 46: Figure 2: Hermosa project tenement map
Figure 2: Hermosa project tenement map Strategy and Business Update 2024 – Flux Exploration Results
Slide 47: Figure 3: Hermosa project regional geology
Figure 3: Hermosa project regional geology Strategy and Business Update 2024 – Flux Exploration Results
Slide 48: Flux Exploration Results
Strategy and Business Update 2024 – Flux Exploration Results
Slide 49: Figure 4: Flux prospect collar locations and drill traces
Figure 4: Flux prospect exploration results collar locations and drill traces Strategy and Business Update 2024 – Flux Exploration Results
Slide 50: Figure 5: Plan maps showing the Flux Prospect location
Figure 5: Plan maps showing the Flux Prospect location relative to the Hermosa Project and broader land package and zoomed in map showing drilling results at the Flux Prospect. Figure 6: Cross section B-B’, 365 meters wide, looking north. Cross section show simplified geology, historic workings, and
Slide 51: Table 1 and 2: Flux drill holes and significant intersections
Table 1: Hole ID, collar location, dip, azimuth and drill depth of new drill holes East North Elevation Hole ID Dip Azimuth Depth (m) (UTM) (UTM) (m) FDS23-001a 523049 3483922 1460.0 -60 190 441.0 FDS23-003 523050 3483914 1460.5 -90 0 609.6 FDS23-004 522977 3484127 1464.5 -68 40 424.3 FDS23-005 5229
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