Thungela Resources Limited · JSE:TGA
Thungela Resources — Investor Day (May 2021)
102 slides from Thungela Resources's investor day presentation, May 6, 2021
Slide 1: Thungela Resources - A Leading Export Thermal Coal Business
Thungela Resources - A Leading Export Thermal Coal Business 6 May 2021
Slide 2: Disclaimer
Disclaimer Disclaimer: This presentation has been prepared by Thungela Resources Limited (“Thungela”) and comprises the written materials/slides for a presentation concerning Thungela. By attending this presentation and/or reviewing the slides you agree to be bound by the following conditions. The r
Slide 3: Section 1: Welcome and Transaction Overview
Section 1 Welcome and Transaction Overview Ryan Africa
Slide 4: Agenda for the Day
Agenda for the Day Start (UK Time) Start (SA Time) Topic Presenter Page 8:00 9:00 1. Welcome and Overview of Transaction Ryan Africa 3 8:10 9:10 2. Introduction to the Company July Ndlovu 7 8:25 9:25 3. Thermal Coal Market Dynamics Bernard Dalton 13 8:50 9:50 4. Reserves and Resources Leslie Martin
Slide 5: Transaction Summary
Transaction Summary Transaction • Demerger of Anglo American’s thermal coal operations in South Africa Overview Listing Entity • Thungela Resources Limited • Primary listing on the Johannesburg Stock Exchange (JSE Ticker: TGA) Listing Venue • Standard listing on the London Stock Exchange (LSE Ticker
Slide 6: Today's Presenters
Today’s Presenters July Ndlovu Deon Smith Johan Van Schalkwyk Leslie Martin Chief Executive Officer Chief Financial Officer Chief Operating Officer Executive Head of Technical 30 15 24 25 Carina Venter Lesego Mataboge Mpumi Sithole Bernard Dalton Executive Head of Safety, Health and Executive Head o
Slide 7: Section 2: Introduction to the Company
Section 2 Introduction to the Company July Ndlovu
Slide 8: Our Purpose, Ambition and Values
Thermal Intro R&R Assets Financial ESG HR Coal Our Purpose, Ambition and Values Purpose Responsibly creating value together for a shared future Ambition Be a leading export thermal coal business Continued Focus How to Succeed • Concentrate on existing assets • Elimination of fatalities • Retain sing
Slide 9: Thungela at a Glance
Thermal Intro R&R Assets Financial ESG HR Coal Thungela at a Glance A High Quality Thermal Coal Business High Quality Operations As of 2020 Underground Operations (Thungela’s effective ownership) 5,500 kcal/kg 16.5 Mt 137 Mt Export 2020 Total Production (Mt) Calorific value Saleable Reserves product
Slide 10: Summary Financials
Thermal Intro R&R Assets Financial ESG HR Coal Summary Financials Revenue Adjusted EBITDA Rm Rm Average Export Sales Price (R/t) 1,060 24,545 788 798 18,592 18,254 8,116 702 (1,024) 2018 2019 2020 2018 2019 2020 Capex Adjusted Operating FCF1 Rm Rm 3,863 2,815 2,869 4,131 (1,688) (1,741) 2018 2019 20
Slide 11: Key Leadership
Thermal Intro R&R Assets Financial ESG HR Coal Key Leadership Board of Directors Executive Management July Ndlovu Person Chair- Sango Ntsaluba Chairperson CEO Deon Smith July Ndlovu CFO CEO Executive Directors Johan Van Schalkwyk Deon Smith Chief Operating Officer CFO Carina Venter Head of Safety, H
Slide 12: Key Messages for Today
Thermal Intro R&R Assets Financial ESG HR Coal Key Messages for Today 1 Thermal coal remains a key pillar of the global energy mix 2 Strong track record of reserves and resources conversion 3 Well positioned portfolio of assets 4 Robust balance sheet; opportunity for cost and capital optimisation St
Slide 13: Section 3: Thermal Coal Market Dynamics
Section 3 Thermal Coal Market Dynamics Bernard Dalton
Slide 14: Thermal Coal Remains a Key Energy Pillar
Thermal Intro R&R Assets Financial ESG HR Coal Thermal Coal Remains a Key Energy Pillar 2020 2030 Global thermal coal power 9,235 TWh 10,391 TWh generation Renewables 10% Other Renewables 2% 20% Oil Other Thermal 2% Thermal 1% coal Nuclear coal Oil 31% Global power 10% 26,141 35% 1% 32,891 generatio
Slide 15: Robust Global Demand for Thermal Coal, Particularly in Asia
Thermal Intro R&R Assets Financial ESG HR Coal Robust Global Demand for Thermal Coal, Particularly in Asia • Average global coal-fired Global Coal-fired Power Generation is Expected to Remain Robust… power generation of ~10,200 TWh over next 10 years, TWh exceeds 2020 generation of 12,000 Forecast 1
Slide 16: Developing Economies a Key Export Destination: India, a Case Study
Thermal Intro R&R Assets Financial ESG HR Coal Developing Economies a Key Export Destination: India, a Case Study • India is the largest export ~19% increase market for South African thermal coal and is a good 192 proxy for the rest of the market 183 180 in South Asia • Currently 17% of seaborne 162
Slide 17: Similar Demand Outlook in Other Key Asian Markets
Thermal Intro R&R Assets Financial ESG HR Coal Similar Demand Outlook in Other Key Asian Markets China • Total seaborne thermal coal demand expected to decrease from 187 Mt in 2020 to 149 Mt in 2030, however requires Pakistan significant import tonnages given domestic supply issues • 5 GW of coal-fi
Slide 18: South African Thermal Coal Seaborne Supply in Decline
Thermal Intro R&R Assets Financial ESG HR Coal South African Thermal Coal Seaborne Supply in Decline • Total South African seaborne Mt supply forecast to decline by 78 23 Mt between 2020 and 2035 80 • Production capacity is forecast 72 to decline as coal reserves are 70 66 depleted at currently oper
Slide 19: These Positive Fundamentals are Supporting Higher Prices
Thermal Intro R&R Assets Financial ESG HR Coal These Positive Fundamentals are Supporting Higher Prices • Our range of calorific export Wood Mackenzie Expecting Higher Prices for an Extended Period products are well-suited to this environment Market prices, $/t1 • Prices of thermal coal have 120 rec
Slide 20: Majority of Thungela's Assets are Low on the Cost Curve
Thermal Intro R&R Assets Financial ESG HR Coal Majority of Thungela’s Assets are Low on the Cost Curve 2021 Global Energy Adjusted Seaborne Thermal FOB Total Cash Cost Curve $/t 120 Q1 Q2 Q3 Q4 100 Khwezela 80 Group Goedehoop weighted Greenside average 60 Mafube $49.9 Zibulo 40 20 0 Cumulative produ
Slide 21: Pricing Mechanics for South African Export Thermal Coal
Thermal Intro R&R Assets Financial ESG HR Coal Pricing Mechanics for South African Export Thermal Coal • South African benchmark R/t thermal coal price is FOB Richards Bay 6,000 kcal/kg 1,600 • Average realised prices for export thermal coal differs from 1,400 the benchmark due to: 1,353 – Relative
Slide 22: Reconciliation of 2020 Benchmark to Realised Price
Thermal Intro R&R Assets Financial ESG HR Coal Reconciliation of 2020 Benchmark to Realised Price Benchmark Price to Realised Export Price R/t 1,082 798 Total Discount for 2020: ~26% Benchmark Linear Product Marketing Realised Market Price Calorific Discount Quality Discount Margin Export Price • Dr
Slide 23: Brief Overview of Domestic Contracts
Thermal Intro R&R Assets Financial ESG HR Coal Brief Overview of Domestic Contracts • On 2 July 2019, Thungela and Sasol entered into an agreement for the supply of coal by the Isibonelo colliery to Sasol Synfuels • Agreement expires on 30 June 2025 unless extended Isibonelo • Pricing is based on va
Slide 24: Richards Bay Coal Terminal - A Leading Global Coal Export Terminal
Thermal Intro R&R Assets Financial ESG HR Coal Richards Bay Coal Terminal - A Leading Global Coal Export Terminal • Thungela has an equity ownership of 23.2% in the operating company of the Richards Bay Coal Terminal (RBCT) • RBCT has undergone several expansions since its commissioning in 1976, wit
Slide 25: Section 4: Reserves and Resources
Section 4 Reserves and Resources Leslie Martin
Slide 26: Coal Resources in the Coalfield
Thermal Intro R&R Assets Financial ESG HR Coal Coal Resources in the Coalfield 4 economic seams and MRDs form the basis of a primary product and middlings of varying qualities Approximate Thickness (Metres) 5.0 Soil & Soft Overburden • No. 5 Seam - high quality shallow and relatively thin seam that
Slide 27: Well Diversified Portfolio with Further Brownfield Optionality
Thermal Intro R&R Assets Financial ESG HR Coal Well Diversified Portfolio with Further Brownfield Optionality 2020 Attributable Reserves1 2020 Attributable Resources2 Mt Mt Underground Operations Opencast Operations Underground Operations Opencast Operations 27 2 200 57 7 10 756 33 37 221 28 27 409
Slide 28: Opportunity to Refocus on Reserves Replacement with Focused Capital Allocation
Thermal Intro R&R Assets Financial ESG HR Coal Opportunity to Refocus on Reserves Replacement with Focused Capital Allocation Attributable Reserves Evolution1 Commentary Mt A Thermal coal production from reserves from Potential upside from 2017 to 2020 projects at various stages of feasibility asses
Slide 29: Significant Resource Potential from Projects
Thermal Intro R&R Assets Financial ESG HR Coal Significant Resource Potential from Projects Attributable Resources Evolution from Operations and Projects1 Commentary Mt A Conversions to reportable reserves B Inclusions (positive) and exclusions 2,111 2,987 (negative) of resources as a result of vari
Slide 30: Asset Overview of Reserve and Resource Base
Thermal Intro R&R Assets Financial ESG HR Coal Asset Overview of Reserve and Resource Base Attributable ROM Attributable Saleable Calorific Value1,2 Attributable Resources1,3 Asset Reserves1 Reserves1 (kcal / kg) (Mt) (Mt) (Mt) Zibulo 48.0 34.5 6,010 408.7 Greenside 31.0 21.1 5,740 18.5 Goedehoop 27
Slide 31: Section 5: Introduction to the Assets
Section 5 Introduction to the Assets Johan Van Schalkwyk and Leslie Martin
Slide 32: Asset Overviews
Asset Overviews Section 5 A Johan Van Schalkwyk
Slide 33: High Quality Operations Delivering Premium Products
Thermal Intro R&R Assets Financial ESG HR Coal High Quality Operations Delivering Premium Products Underground Operations Open Cast Operations Mining Area 1 Zibulo 73%1 4 Mafube 50%2 Reserves3 48 Mt Reserves3 28 Mt 5.2 Resources4 409 Mt 1.8 Resources4 33 Mt LOM 9 years LOM 11 years 2 Greenside 100%
Slide 34: Zibulo Overview
Thermal Intro R&R Assets Financial ESG HR Coal Zibulo Overview Multi-product mine delivering high quality export coal Operation Schematic Key Mine Facts Source of Coal Underground Open cast General Manager 73% Owned and Managed Thungela Tman Mphokane Operation (20 years experience) Ownership Silo Ph
Slide 35: Zibulo Plan
Thermal Intro R&R Assets Financial ESG HR Coal Zibulo Plan Produces premium export product and middlings product • Consistent saleable production Saleable Production1 over LOM Mt • Primary yield ~50%, 6,000 kcal/kg product • First quartile of the global seaborne cost curve 6.3 6.1 6.1 6.1 6.1 • Stri
Slide 36: Zibulo Life Extension
Thermal Intro R&R Assets Financial ESG HR Coal Zibulo Life Extension Could add 10 years of life Zibulo LOM Extension • Progressing to feasibility study phase +10 years • Project focusing on extraction of 2 Seam coal 19 • Adds c.10 years to current LOM • c.8.4Mt of ROM production per annum 9 Current
Slide 37: Greenside Overview
Thermal Intro R&R Assets Financial ESG HR Coal Greenside Overview Export product mine with additional product from MRD Operation Schematic Key Mine Facts Source of Coal Mineral Residue Underground General Manager Deposits1 100% Owned and Managed Thungela Neo Monareng Operation (19 years experience)
Slide 38: Greenside Plan
Thermal Intro R&R Assets Financial ESG HR Coal Greenside Plan Progressing to fully export focused production • Primary export saleable Saleable Production1 production fairly consistent over the next 5 years Mt • Product flexibility in terms of market supply (domestic vs 1.1 1.3 0.9 1.1 export) - - -
Slide 39: Goedehoop Overview
Thermal Intro R&R Assets Financial ESG HR Coal Goedehoop Overview Underground export operation with domestic product from MRD Operation Schematic Key Mine Facts Source of Coal Mineral Residue Underground General Manager Deposits1 100% Owned and Managed Thungela Dawid Taljaard Operation (31 years exp
Slide 40: Goedehoop Plan
Thermal Intro R&R Assets Financial ESG HR Coal Goedehoop Plan Two shift mechanised bord and pillar operation • Saleable export production Saleable Production1 consistent over the next 3 years Mt • Domestic MRD production ends in 2023 2.1 3.9 3.0 • Primary product yield ~55%, 3.0 1.5 5,700 kcal/kg pr
Slide 41: Mafube Overview
Thermal Intro R&R Assets Financial ESG HR Coal Mafube Overview Joint ownership operation producing exclusively for the export market Operation Schematic Key Mine Facts Source of Coal Open cast General Manager Operations 50% Joint Venture Operation – Thungela Independently Shepherd Nkadimeng Ownershi
Slide 42: Mafube Plan
Thermal Intro R&R Assets Financial ESG HR Coal Mafube Plan Production of consistently high-quality export product • Consistent delivery of >3.5Mt Saleable Export Production1,2 of saleable product over LOM Mt • Positioned within the second quartile of the global seaborne cost curve • Primary product
Slide 43: Khwezela Overview
Thermal Intro R&R Assets Financial ESG HR Coal Khwezela Overview Export product from new Navigation section Operation Schematic Key Mine Facts Source of Coal Opencast General Manager Operations 100% Owned and Managed Thungela Luctor Roode Operation (26 years experience) Ownership Beneficiation Coal
Slide 44: Khwezela Plan
Thermal Intro R&R Assets Financial ESG HR Coal Khwezela Plan Production from the new Navigation pit, producing exclusively for the export market • Saleable production fairly Saleable Production1 consistent over LOM going forward Mt • Decrease in production from 2.5 2021 due to Bokgoni being 2.9 plac
Slide 45: Khwezela Life Extension
Thermal Intro R&R Assets Financial ESG HR Coal Khwezela Life Extension Conversion of resource adds potentially 10 years of life Khwezela LOM Extension • Progressing to feasibility study phase +10 years • Targeting the Clydesdale area as an open cast operation 18 • c.4.6Mt of ROM production per annum
Slide 46: Isibonelo Overview
Thermal Intro R&R Assets Financial ESG HR Coal Isibonelo Overview Simple mining operation producing a crushed and screened raw product Operation Schematic Key Mine Facts Source of Coal Open cast General Manager Operations 100% Owned and Managed Thungela Dirk Miller Operation (33 Years experience) Ow
Slide 47: Isibonelo Plan
Thermal Intro R&R Assets Financial ESG HR Coal Isibonelo Plan Consistent delivery into Sasol Synfuels CSA • Two open pits producing 4.8 Saleable Domestic Production1 Mtpa of ROM coal Mt 4.8 4.8 • Product is sold raw, once 4.8 4.8 4.5 4.6 crushed and screened, to 4.2 Sasol 3.4 • Sustaining capex is p
Slide 48: Rietvlei Overview
Thermal Intro R&R Assets Financial ESG HR Coal Rietvlei Overview Thungela holds a minority stake in the Rietvlei Colliery • Construction of the Rietvlei Historical Production Colliery started in November 2018 with first production Mt during 2019 +1.3 • Thungela has a 34% interest in Rietvlei collier
Slide 49: Production Potential
Thermal Intro R&R Assets Financial ESG HR Coal Production Potential Saleable production potential as depicted in the Competent Person’s Reports Saleable Production by Mine1,2,3 Saleable Production by Market1,2,3 Mt Mt 28 28 28 28 26 26 5 4 25 25 5 23 23 5 12 13 9 6 6 5 9 6 6 6 4 5 4 5 5 3 6 6 3 3 2
Slide 50: Portfolio Evolution and Impact on Saleable Production
Thermal Intro R&R Assets Financial ESG HR Coal Portfolio Evolution and Impact on Saleable Production Sub economic production removed from plan in 2021 28 (2) (2) 3 26 (1) 25 1 2 3 1 2020 Bokgoni C&M Landau 3 Umlalazi closure Other Adjusted 2020 2021 Notes: 1. Excludes Rietvlei production 2. Landau 3
Slide 51: Successful Track Record of Developing and Operating Assets
Successful Track Record of Developing and Operating Assets Section 5 B Leslie Martin
Slide 52: Developing the Asset Base to Ensure Business Life
Thermal Intro R&R Assets Financial ESG HR Coal Developing the Asset Base to Ensure Business Life The hard decisions have been taken to protect the business Business Life Extended Through Execution of Projects Taking Decisions to Protect the Business All Projects Delivered on Time and Budget to Date
Slide 53: Focus on Operating Improvement
Thermal Intro R&R Assets Financial ESG HR Coal Focus on Operating Improvement Improve the productivity of the mines Positive Approach to Improving Business Performance Goedehoop Prime Section kt RoM/Annum +54% 1,200 • Goedehoop prime section: – Prime sections delivered a 54% improvement in productio
Slide 54: Changing the Way Things are Done
Thermal Intro R&R Assets Financial ESG HR Coal Changing the Way Things are Done A team that has innovated and continues to improve the business Business Improvements Dragline Bucket Load Enhancement • Advanced Process Control: +25% – Operating enhancement through automation • Geophones: 125% – Utili
Slide 55: Q&A
Q&A
Slide 56: Section 6: Financial and Regulatory
Section 6 Financial and Regulatory Deon Smith
Slide 57: Financial Overview
Financial Overview Section 6 A Deon Smith
Slide 58: Simplified Financial Model
Thermal Intro R&R Assets Financial ESG HR Coal Simplified Financial Model 2020 Performance1 Export saleable production 16.5 Mt 2021 production guidance: 15-16 Mt Benchmark export price Realised discount R1,082/t ~26% <20% current discount R2.7bn EBITDA Average realised export price R798/t for +$10/t
Slide 59: Revenue - Considerations in Relation to the AA Offtake Agreement
Thermal Intro R&R Assets Financial ESG HR Coal Revenue - Considerations in Relation to the AA Offtake Agreement Key Features of the Offtake Agreement Benchmark Price to Realised Export Price R/t Term • Three-years, with an additional transitional period of up to six months thereafter 1,082 • Based o
Slide 60: Revenue – Considerations in Relation to Capital Support Mechanism
Thermal Intro R&R Assets Financial ESG HR Coal Revenue – Considerations in Relation to Capital Support Mechanism Key Features of the Capital Support Agreement Term • From demerger to 31 December 2022 • Minimum price set at R1,175 per tonne of benchmark quality coal and adjusted in accordance with th
Slide 61: Robust Balance Sheet with Additional Capital Support in Place
Thermal Intro R&R Assets Financial ESG HR Coal Robust Balance Sheet with Additional Capital Support in Place Pro Forma Capitalisation Rm 2,500 2,500 All intercompany cash and debt extinguished on 31 1,500 May 2021 0 At 1 June 2021 Day 1 Cash Injection Potential Capital Support 2021 Potential Capital
Slide 62: Working Capital Analysis
Thermal Intro R&R Assets Financial ESG HR Coal Working Capital Analysis Key Balance Sheet Working Capital Items Rm Historically low and will likely revert to Going forward, will 576 528 174 historical norms largely accrue from going forward Anglo American given the marketing arrangements 3,453 3,368
Slide 63: Breakdown of Capital Expenditure
Thermal Intro R&R Assets Financial ESG HR Coal Breakdown of Capital Expenditure Capital Expenditure by Category Rm 3,863 Expansionary/lifex Expected to Extending life of existing decrease linearly assets between the 2021 and 2023 forecasts 2,815 2,869 ~2,600 – 3,000 2,080 870 1,111 Stripping and dev
Slide 64: Closure Costs Provision and Funding
Thermal Intro R&R Assets Financial ESG HR Coal Closure Costs Provision and Funding Environmental Costs and Funding Status as at 31 December 2020 Rm 6,450 3,189 6,091 Non-Current - 5,676 3,090 3% Green fund - 188 A minimum of 5.5% of Cash in outstanding 45% Trust - 2,902 guarantees to be invested int
Slide 65: Operating Cost Analysis
Thermal Intro R&R Assets Financial ESG HR Coal Operating Cost Analysis Evolution of Operating Costs Rm 20,351 19,132 1,073 Non- 18,5971 Non- 12% 1,242 1,277 Cash 1,659 9% Non- 2% 202 8% Cash 4% 786 2% 290 Cash 4% 722 462 802 746 4% 4% 1,429 6% 1,287 5% 991 7% 20% 3,648 21% 4,057 19% 3,894 Cash 38% 7
Slide 66: Cost Momentum Expected to be Positive Post-demerger
Thermal Intro R&R Assets Financial ESG HR Coal Cost Momentum Expected to be Positive Post-demerger Evolution of Costs Rm 20,351 Khwezela 802 Total Operating Costs Bokgoni Care and Navigation Ramp Up Anglo American Transitional Services Standalone Service Total Operating Costs 2020 Maintenance Rechar
Slide 67: 2020 All-in Sustaining Cost for the Business
Thermal Intro R&R Assets Financial ESG HR Coal 2020 All-in Sustaining Cost for the Business Total Export Costs Export Costs per Saleable Tonne Rm R/t Includes movement in rehab liability (R78/t) and 20,351 (6,629) Targeting flat FOB depreciation and amortisation (R65/t) export costs on a real basis
Slide 68: Robust and Transparent Approach to Capital Allocation
Thermal Intro R&R Assets Financial ESG HR Coal Robust and Transparent Approach to Capital Allocation • Balanced and disciplined approach to allocating capital 1 2 • Priority is stay-in-business capex, Sustaining Green capital fund green fund then base dividend Operating • Projects must compete with
Slide 69: Group Operational Outlook
Thermal Intro R&R Assets Financial ESG HR Coal Group Operational Outlook Export Saleable Production FOB Export Costs Mt R/t, real 833 ~830 ~830 16 >16 >16 15-16 Targeting flat FOB export costs on a real basis for the next three years 2020A 2021F 2022F 2023F 2020A 2021F 2022F 2023F Capex R Bn Expecte
Slide 70: Regulatory Considerations, Licensing and Permits
Regulatory Considerations, Licensing and Permits Section 6 B Deon Smith
Slide 71: Broad-Based Black Economic Empowerment status
Thermal Intro R&R Assets Financial ESG HR Coal Broad-Based Black Economic Empowerment status • Thungela is sufficiently empowered and meets and exceeds the empowerment requirements of the MPRDA Current Status • Thungela has been empowered through a number of transactions over the years which include
Slide 72: Key Mining Rights
Thermal Intro R&R Assets Financial ESG HR Coal Key Mining Rights Thungela’s mining rights more than cover the existing asset lives and Thungela either owns or has security of tenure over the majority of the land required to continue with mining operations Greenside Dalyshope • 2 rights1 • 1 right1 •
Slide 73: Section 7: ESG
Section 7 ESG July Ndlovu, Carina Venter and Mpumi Sithole
Slide 74: A Robust ESG Framework Underpins our Licence to Operate
Thermal Intro R&R Assets Financial ESG HR Coal A Robust ESG Framework Underpins our Licence to Operate A strong policy centred around the social impact of our business ESG FRAMEWORK Environmental Stewardship Shared Value for our Responsible Decision-Making Stakeholders and Leadership We minimise our
Slide 75: Corporate Governance Principles
Thermal Intro R&R Assets Financial ESG HR Coal Corporate Governance Principles Establishing an orderly environment and creating value for all shareholders Key Pillars of Corporate Governance Pillars of Value Purpose, Strategy and Values Financial Safety and Health Environmental Social and So
Slide 76: Experienced and Diverse Board
Thermal Intro R&R Assets Financial ESG HR Coal Experienced and Diverse Board Covers all relevant areas of expertise Executive Listed Company Board of Directors Experience Mining Experience Board Experience July Ndlovu Non-independent Directors CEO Deon Smith CFO Seamus French Non-Executive Director
Slide 77: Board Committees
Thermal Intro R&R Assets Financial ESG HR Coal Board Committees To establish strong governance and ensure effective oversight of important areas Other Board Meeting Minimum # of Committee Members1 Attendees Meetings Majority of committee members are independent 1 non-executive directors • Kholeka Mz
Slide 78: Carina Venter
thingela Carina Venter
Slide 79: Safety, Health and Wellbeing at the Forefront of the Business
Thermal Intro R&R Assets Financial ESG HR Coal Safety, Health and Wellbeing at the Forefront of the Business Zero harm is our commitment Description and Overview Key Objectives Elimination of loss of life incidents: • Zero loss of life incidents – Back to basics – A clear set of fundamentals, which
Slide 80: Progress in Safety and Health
Thermal Intro R&R Assets Financial ESG HR Coal Progress in Safety and Health Continued and consistent improvements in Safety and Health Key Safety Metrics Key Health Metrics2,3 % (29%) 42 100% 100% 100% 2 34 30 1.85 1.48 1.51 94% 93% 93% 92% 92% 1 91% 1 2018 2019 2020 Known HIV Status Receiving ART
Slide 81: Environmental Stewardship
Thermal Intro R&R Assets Financial ESG HR Coal Environmental Stewardship Managing our resources to ensure sustainability Objectives Targets • 15% improvement in Energy Efficiency against • Reduce energy consumption business-as-usual projections by 2025 Efficient use of • Reduce freshwater consumptio
Slide 82: Flagship Environmental Initiatives
Thermal Intro R&R Assets Financial ESG HR Coal Flagship Environmental Initiatives Thungela initiatives which add back value to the environment • Commissioned eMalahleni Water Reclamation Plant in October 2007 at a cost of ~ZAR1.4bn eMalahleni Water • Augments drinking water supply to eMalahleni loca
Slide 83: Reducing GHG Emissions
Thermal Intro R&R Assets Financial ESG HR Coal Reducing GHG Emissions Significant progress made, but remains a key focus area • Achieved a 16% reduction in CO2e Total CO2 equivalent (Mt CO2e) since 2018, though this includes Mt CO2e (16%) asset disposals, assets on care and maintenance and the 2020
Slide 84: Mpumi Sithole
thingela Mpumi Sithole
Slide 85: Community Partnerships
Thermal Intro R&R Assets Financial ESG HR Coal Community Partnerships Building an inclusive environment Description and Overview Key Objectives • Respect and uphold human rights • Zero human rights violations resulting from our activities • Create a conducive environment to engage to work together •
Slide 86: Partnering with our Stakeholders for Shared Value
Thermal Intro R&R Assets Financial ESG HR Coal Partnering with our Stakeholders for Shared Value Our people are integral to our business Overview Of Thungela’s Community and Employee Ownership Key Transaction Outcomes and Benefits Commitment to enduring positive 1 legacy Community Employee Partnersh
Slide 87: Uplifting the Communities where we Operate
Thermal Intro R&R Assets Financial ESG HR Coal Uplifting the Communities where we Operate Community upliftment is a key priority for Thungela c.R90m Spent Around our Communities (2020) Case Study 1 – Improving Healthcare at Mafube Social Development Spend (Rm) 30 29 • Clinic built to serve 26 Sikhul
Slide 88: Responding to a New COVID Environment
Thermal Intro R&R Assets Financial ESG HR Coal Responding to a New COVID Environment Taking measures to protect the health and wellbeing of our employees and their families • Rolled out the WeCare programme to all WeCare – Programme launched to mitigate Covid-19 impact and the national lockdown • Hi
Slide 89: Host Community Spend
Thermal Intro R&R Assets Financial ESG HR Coal Host Community Spend Continued increase in spend into our communities Growing Spend in the Community Host Community Spend (Rbn) Host community spend has increased by 67% since 2018 67% 1.50 1.20 Direct spend into communities 0.90 Creates employment oppo
Slide 90: Section 8: HR and Industrial Relations
Section 8 HR and Industrial Relations Lesego Mataboge
Slide 91: Optimised Workforce
Thermal Intro R&R Assets Financial ESG HR Coal Optimised Workforce Stable and experienced workforce across our operations Our Employees Employee Mix Number of Employees (2020) Breakdown of Employees (2020) Total Employees: 1,591 7,5251 Contractor 36% 1,357 Permanent 64% 1,104 904 759 7212 Employee A
Slide 92: Employee Relations
Thermal Intro R&R Assets Financial ESG HR Coal Employee Relations Sound employee relations practices maintain strong relationships Trade Union Considerations Wage Agreements • Majority of the workforce unionised under National Union of Mineworkers • Covers c.86% of employees (NUM) Collective • A two
Slide 93: Inclusion and Diversity
Thermal Intro R&R Assets Financial ESG HR Coal Inclusion and Diversity We are creating a culture that values inclusion and diversity Inclusion and Diversity Policy % of HDSA at Senior Levels % of Employees (2020) • Underpinned by the Company’s values and code of Thungela Values conduct Senior 59% Ma
Slide 94: Talent Management
Thermal Intro R&R Assets Financial ESG HR Coal Talent Management Developing talent through interventions Wide Range of Initiatives Training and Development Outcomes Bursary and Graduate Development Programme for key disciplines Female representation in talent pool: 32% Leadership Development Program
Slide 95: Section 9: Investment Proposition Recap
Section 9 Investment Proposition Recap July Ndlovu
Slide 96: Thungela Investment Proposition
Thungela Investment Proposition 1 Leading South African thermal coal exporter 2 Integrated rail and port infrastructure Low cash cost and high margin assets, well-positioned to benefit from favourable thermal coal 3 market environment 4 Strong pipeline of brownfield and greenfield options 5 Right-si
Slide 97: Q&A and Closing Remarks
thipgela Q&A and Closing Remarks
Slide 98: Appendix
th igela Appendix
Slide 99: Organisational Structure Accounting and Tax Implications
Organisational Structure Accounting and Tax Implications Post-demerger Organisational Structure of the Group Thungela Resources Limited Employee Nkulo Community Partnership Plan Partnership Trust 5% 90% 5% Anglo American Marketing Limited South African Coal Operations Pty Ltd (“SACO”) 73% 50% Anglo
Slide 100: Considerations in Relation to the AA Offtake Agreement
Considerations in Relation to the AA Offtake Agreement “The Offtake Agreement ensures that customers receive a consistent service and supply of thermal coal while Thungela concentrates on enhancing the performance of its operations while continuing to receive optimal value for its products in the ma
Slide 101: Considerations in Relation to Capital Support Mechanism
Considerations in Relation to Capital Support Mechanism “Whilst the current outlook for export thermal coal prices remains positive, abnormally weak market conditions for seaborne thermal coal were experienced globally during 2020 as a result of lower global demand and market uncertainty stemming fr
Slide 102: Thank you
Thank you