Anglo American plc · LSE:AAL
Anglo American — Corporate Update (January 2013)
18 slides from Anglo American's corporate update, Jan 29, 2013
Slide 1: Minas-Rio Review
MINAS-RIO REVIEW 29 January 2013
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: Business case as presented at time of purchase
BUSINESS CASE AS PRESENTED AT TIME OF PURCHASE “Rationale for acquiring the project(1) – Board made a long term strategic decision to substantially grow our iron ore portfolio – one of the cornerstones of Anglo’s strategy – Minas-Rio provides quality product on a huge scale – Differentiated product
Slide 4: Business case for Minas-Rio remains intact
BUSINESS CASE FOR MINAS-RIO REMAINS INTACT Good future fundamentals Significant increase in resource • Medium to long term fundamentals for iron ore remain • Delineated 5.8 bn from 1.2 bn tonnes of Mineral Resources robust 180.0 160.0 ~5x 140.0 5.8 Average spot price 120.0 Fe US$/t 100.0 Consensus l
Slide 5: Business case for Minas-Rio remains intact (cont.)
BUSINESS CASE FOR MINAS-RIO REMAINS INTACT (CONT.) Maintains a low cost position High quality & low contaminant product 160 10% 150 140 Australia - high quality 130 8% Australia - 120 medium quality India Other Africa 110 CIS CIF cost China (US$/t) 100 Alumina + silica content 6% 90 80 China (1) Nor
Slide 6: ... but Brazil is a developing country
... BUT BRAZIL IS A DEVELOPING COUNTRY Evolving regulatory environment - Cost pressures and skill shortages in Brazil a challenge for many projects are real in Brazil 310 12 Brazilian components escalation (index 2006 =100) Project Capex Delay escalation (months) 280 (%) 10 Brazilian unemployment ra
Slide 7: Project Overview
PROJECT OVERVIEW Mine and Beneficiation (Minas Gerais) Port (RJ) Pipeline 525 km 5.8b US$c.30/t 26.5 Mtpa initially 68% Fe Resources Cash cost (FOB) Up to 90 Mtpa in expansion Pellet feed 7
Slide 8: Continuing progress during the past 12 months
CONTINUING PROGRESS DURING THE PAST 12 MONTHS At end of 2012 At end 2011 Beneficiation plant • Earthworks nearing completion 92% 79% • Concrete poured 79,000 m3 29,000 m3 • Release of caves for construction 4 of 4 (September 2012) 2 of 4 • Tailings dam land access 21 of 21 secured 8 of 21 secured •
Slide 9: Capex escalation reconciliation
CAPEX ESCALATION RECONCILIATION $bn 0.6 0.8 0.5 0.2 0.3 1.0 8.8 8.2 5.8 Approved FOOS delay Impact of Escalation FX net of Capex review Revised Contingency Revised budget licences and and price hedge items budget budget incl. agreements amendments contingency 9
Slide 10: Key short term schedule risks
KEY SHORT TERM SCHEDULE RISKS FOOS date impact Context In the event of a 3-6 month Comments delay (from cut-off date) Mine • Active engagement with • Cave impacts the pre-stripping H1 2015 authorities • Cave 1 suppression activities (rainy season) • Authorisation anticipated in H1 and Mine Access •
Slide 11: Improving project delivery
IMPROVING PROJECT DELIVERY Efficiency Licensing and Permitting Group reorganisation to allow Iron Ore Brazil (IOB) team Licence office established to monitor and track licences, to solely focus on Minas-Rio project delivery permits and conditionings in advance of construction activities IOB or
Slide 12: Impairment considerations
IMPAIRMENT CONSIDERATIONS Impairment considerations Carrying value • Base case valuation for impairment test does not Carrying value at 31 December 2012 $bn include the potential value from future Acquisition cost(1) 5.2 expansions to 90 Mtpa Capex to date 3.8 • Full impairment test included sensiti
Slide 13: Key messages
KEY MESSAGES • Medium and long term attractiveness and strategic • INSERT PHOTO positioning of Minas-Rio remains intact • Cost and schedule review completed, including a detailed re-evaluation of all aspects of the outstanding schedule, with a focus on maximising value and mitigating risk • Good pro
Slide 14: Appendix
AngloAmerican APPENDIX
Slide 15: Beneficiation plant: current status and points of attention
BENEFICIATION PLANT Current status and points of attention Key stats 53% complete 92% of beneficiation plant earthworks completed 43 of 187 transmission line towers released for construction 79,000 m3 of concrete poured to date ~4,000 people at site Continuous focus on government relations LICENSI
Slide 16: Pipeline: current status and points of attention
PIPELINE Current status and points of attention Key stats 66% complete 76% cleared for pipe laying > 247 km ; ~50% of pipe laid 95% of 1,555 properties realised ~6,000 people at site FRONT 1 LICENCES Complete relocation of legal reserves Conclude final arrangements in partnership with Minas Gera
Slide 17: Port: current status and points of attention
PORT Current status and points of attention Key stats 52% complete 100% stackers and reclaimer erected 77% of Filtration Plant completed ~1,500 people at site BREAKWATER Mobilise breakwater construction Complete electromechanical activities CONSTRUCTION Installation of ship loader PORT OPERATI
Slide 18: Pre-operations: current status and points of attention
PRE-OPERATIONS Current status and points of attention Key stats 46% complete 5.8 bn tons of mineral resources 1.4 bn tons of ore reserves 24h / 365d work shift 80 Mtpa material handled 5,400 employees CAVES / PRE-STRIPPING Integrated planning with licensing team Execute work plan to optimise str