Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (March 2006)
36 slides from Bhp's investor presentation, Mar 29, 2006
Slide 1: Hillside & Bayside Aluminium Presentation to Analysts
-1- Hillside & Bayside Aluminium Presentation to Analysts 29 March 2006
Slide 2: Disclaimer
-2- Disclaimer The views expressed herein contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward-looking information in this presentat
Slide 3: Introduction
-3- Introduction Presenter Position Xolani Mkhwanazi COO Southern-Africa Aluminium Julius Matthys Marketing Director Aluminium Lucas Msimanga Acting General Manager Hillside Raitt Marshall General Manager Bayside
Slide 4: Aluminium Southern Africa FY05 Equity Production
-4- Aluminium Southern Africa FY05 Equity Production Mozal 260kt (equity %) Hillside 685kt Bayside 166kt Aluminium Southern Africa comprises of Hillside, Bayside and Mozal ASA Smelters
Slide 5: Smelters Key Messages
-5- Smelters Key Messages • Sustainability is key • World class assets: – Operate at benchmark levels – Low on the cost curve • Cost management – Absolute focus on safety, volume and costs
Slide 6: Marketing Aluminium
-6- Marketing Aluminium Presentation to Analysts 29 March 2006
Slide 7: Setting Production Records in FY05
-7- Setting Production Records in FY05 Alumar 495kt Suriname 874kt Alumar 176 kt Suriname 2,022kt Mozal 260kt MRN 2,338kt Hillside 685kt Valesul 43kt Bayside 166kt Worsley 2,813kt Boddington 9,890kt Bauxite Mines Refineries Smelters
Slide 8: 2005 Alumina & Metal Cash Cost Curves
-8- 2005 Alumina & Metal Cash Cost Curves
Slide 9: Cash Cost Curves By Asset (Source Brook Hunt)
-9- Cash Cost Curves By Asset (Source Brook Hunt) Alumina 2005 2004 2003 Aluminium
Slide 10: The China-Driven Demand Opportunity
-10- The China-Driven Demand Opportunity Global primary aluminium consumption 51mt 32mt 19mt China 10mt 1 7 16 Rest of 10 world 18 1970 25 1990 35 2005 2015
Slide 11: Aluminium and Alumina key messages
-11- Aluminium and Alumina key messages • Alumina and aluminium metal market fundamentals remain positive. • Production problems still a feature of the alumina industry. • Higher alumina and energy prices, particularly in the US and Europe, are supporting higher metal price levels. • Aluminium deman
Slide 12: Alumina market - Update
-12- Alumina market - Update What we see “on the ground” - Demand still very strong in China - Spot prices continue to be supported by supply shortfalls - Chinese capacity coming on-line Market Developments - Alumina price trading at $600/t FOB - Market set to remain tight - Long term price implicat
Slide 13: Alumina Demand and Supply Outlook
-13- Alumina Demand and Supply Outlook 115,000 Demand 105,000 95,000 85,000 kt 75,000 New Production 65,000 Base and capacity creep 55,000 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15
Slide 14: Aluminium Market - Update
-14- Aluminium Market - Update What we see “on the ground” - Stock to consumption ratio still low - No slowing in Chinese production growth - Energy issues still crucial in Europe and US Aluminium price - Prices still trading at high levels - Physical premiums beginning to recover
Slide 15: Aluminium Demand and Supply Outlook
-15- Aluminium Demand and Supply Outlook 55,000 50,000 Demand 45,000 kt 40,000 35,000 New Production 30,000 Base and capacity creep 25,000 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 Calendar Years
Slide 16: Hillside Aluminium Operations
-16- Hillside Aluminium Operations Presentation to Analysts 29 March 2006
Slide 17: Safety
Jul-03 Sep-03 Safety Nov-03 Felt leadership Jan-04 Bayside Mar-04 Behavioural Based Safety May-04 Jul-04 Sep-04 Nov-04 Hillside 12MMA TRIFR Jan-05 Mar-05 May-05 Jul-05 Mozal Sep-05 Nov-05 Jan-06 0 2 4 6 8 10 12 14 -17-
Slide 18: Environment: SO2 Emissions
-18- Environment SO2 Emissions 14000 12347 12000 11731 10902 9581 9870 9368 9624 10000 8000 Tonnes 6000 4000 2000 0 99/00 00/01 01/02 02/03 03/04 04/05 YTD SO2 (tpa) Permit (13500 tpa)
Slide 19: Health
-19- Health • HIV/Aids – Issue is well understood – Actively managed through training and Voluntary Confidential Counselling and Testing program – Good participation from workforce • Employee Wellness Program
Slide 20: Community
-20- Community Over R40 million spent annually this year for Hillside and Bayside, nation-wide on community projects (3 % of profit before tax). Our focus areas include: – Education – Community health – Enterprise development – Crime prevention
Slide 21: World Class Assets
-21- World Class Assets • Hillside is operating amongst the world’s best • AP30 Benchmarking • Key Metrics – Amperage – Production per pot per day – Metal quality – Energy consumption – Net Carbon
Slide 22: AP30 Smelters: Amperage
-22- AP30 Smelters (Nov ’05 - Jan ’06) Amperage (kA) 355 350 345 340 335 330 325 320 315 310 G Hill-3 Mozal2 Hill-1 Hill-2 Mozal1 C D F B A I H E Current 352.9 352.1 351.7 351.6 349.9 349.3 344.2 342.2 341.8 340.3 338.3 335.0 332.8 319.3
Slide 23: AP30 Smelters: Production per pot per day
-23- AP30 Smelters (Nov ’05 – Jan ‘06) Production per pot per day (kg) 2725 2700 2675 2650 2625 2600 2575 2550 2525 2500 Hill-1 Hill-3 Hill-2 G Mozal1 Mozal2 C F B D I H A E Prod/pot/day 2710 2705 2691 2686 2678 2675 2614 2612 2606 2597 2596 2578 2575 2438
Slide 24: AP30 Smelters: Metal quality
-24- AP30 Smelters (Nov ’05 – Jan ‘06) Metal quality (ppm Fe) 1200 1100 1000 Lower impurities 900 800 700 600 500 I Mozal2 Mozal1 A Hill-3 Hill-2 H Hill-1 F B C D G E Fe 675 694 760 783 787 828 864 894 963 973 1023 1058 1152 1375
Slide 25: AP30 Smelters: Energy consumption
-25- AP30 Smelters (Nov ’05 – Jan ’06) Energy consumption (kWh/tAl) 13450 13375 13300 13225 13150 13075 13000 12925 12850 12775 12700 B I A H Hill-2 Hill-1 Hill-3 C F E D G Mozal2 Mozal1 DC_kWh/t Al 12770 12919 12954 12980 13058 13096 13111 13157 13283 13287 13374 13376 13394 13425
Slide 26: AP30 Smelters: Net Carbon
-26- AP30 Smelters (Nov ’05 – Jan ‘06) Net Carbon (kg/tAl) 430 420 410 400 390 380 370 360 350 340 Hill-3 B G A I Mozal2 E Hill-1 D Mozal1 Hill-2 H F C Net Carbon 398 403 406 408 408 409 409 410 411 413 415 418 421
Slide 27: Hillside production volume
-27- Hillside production volume 800 685 700 622 600 534 500 504 501 494 498 502 500 tonnes '000 400 300 200 97 100 0 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05
Slide 28: Hillside EBIT Fiscal Year 1997 – 2005
-28- Hillside EBIT Fiscal Year 1997 – 2005 300 278 250 224 205 200 187 178 175 168 155 US$m 150 109 100 50 0 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05
Slide 29: Hillside Cash Costs
-29- Hillside Cash Costs Co ns umab les Other M aint & Cap ex 6% 4% 4% Co ntracto rs 3% Lab o ur 7% Po t Relining 2% Other Raw M aterials 10 % Alumina & Po wer 64% Fixed cost Variable
Slide 30: Hillside Cash Cost Index
-30- Hillside Cash Cost Index 140 (Indexed to 100 – Base FY01) 120 100 80 60 FY01 FY02 FY03 FY04 FY05 Hillside 3 month LME Prices
Slide 31: Pot Relining in ASA
-31- Pot Relining in ASA $ Million 90 80 70 60 50 40 30 20 10 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Hillside Bayside Mozal
Slide 32: Cost Management
-32- Cost Management Pressure Mitigation • Global sourcing • Raw materials costs • Long term contracts • Blending & usage strategies • Long term price linked contracts • Power cost • Optimisation of power efficiency • Labour and contractor productivity • Labour costs increased
Slide 33: 2005 Cash Cost Curves By Asset (Source Brook Hunt)
-33- 2005 Cash Cost Curves By Asset (Source Brook Hunt) Aluminium Bayside B&C Bayside A Mozal
Slide 34: Power Situation in South Africa
-34- Power Situation in South Africa • BHP Billiton smelter portfolio built on South Africa’s competitive power • Protected by long term secure power contracts with Eskom • Reliable supply despite short term shortages • Working closely with Eskom to manage short term tightness
Slide 35: Key Messages
-35- Key Messages • Sustainability is key • Hillside is a world class Tier 1 asset • Relentless focus on costs • Power situation – Short term tightness – Sound long term fundamentals
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