Anglo American Plc · LSE:AAL
Anglo American — Global Iron Ore & Steel Forecast 2011
26 slides from Anglo American's conference presentation, Mar 23, 2011
Slide 1: Global Iron Ore & Steel Forecast
GLOBAL IRON ORE & STEEL FORECAST QUALITY IRON ORE – A BRAZILIAN & SOUTH AFRICAN PERSPECTIVE James Harman Head of Business Development, Iron Ore & Coal 23 March 2011
Slide 2: Contents
CONTENTS Anglo American – World class mining company – Strong financial position – Diversified across the most attractive commodities Our view of the Global economy – Global economy – Steel outlook Anglo American’s Quality Iron Ore Business – Major growth being developed – South Africa – a unique po
Slide 3: Anglo American
ANGLO AMERICAN
Slide 4: Our ambition is to be the leading global mining company
OUR AMBITION IS TO BE THE LEADING GLOBAL MINING COMPANY Key Corporate & representatives offices E Exploration offices Platinum Diamonds Copper Nickel Iron ore and Manganese Metallurgical Coal Thermal Coal 4
Slide 5: World class mining company
WORLD CLASS MINING COMPANY Outperforming the industry1 Well diversified portfolio2 Structurally attractive commodities3 Op Profit ($bn) Op Profit Margin (%) 12 45% Diamonds China’s share of global consumption (%) 10% 40% 10 35% 21% 11% 8 30% Iron Ore & 27% 62% Manganese 25% 24% 6 Platinum 20% 24% 32
Slide 6: Strong financial position
STRONG FINANCIAL POSITION Underlying EPS – $ Key financials 4.36 2.14 4.13 ($bn) 2010 2009 change Core operating profit(1) 9.1 4.5 +104% Operating profit 9.8 5.0 +97% Effective tax rate 31.9% 33.1% 2.90 Underlying earnings 5.0 2.6 +94% 2.29 Capex(2) 5.0 4.8 1.84 1.46 1.23 EBITDA 12.0 6.9 +73% 0.91 N
Slide 7: Unique and well diversified portfolio
UNIQUE AND WELL DIVERSIFIED PORTFOLIO Attributable earnings by Business Unit1 Attributable earnings by geography % % PRECIOUS 2% 5% 9% 6% 22% 42% 44% 9% 37% 10% 1% 12% Platinum Copper Met Coal KIO ROW Australia/Asia De Beers Nickel Thermal Coal Samancor South America South Africa 1 Core businesses 7
Slide 8: Our view of the global economy
OUR VIEW OF THE GLOBAL ECONOMY
Slide 9: Overall macro economic and market context
OVERALL MACRO ECONOMIC AND MARKET CONTEXT 1. Industrial Recovery 2. Weak USD • Source: Anglo Commodity Research % % 65 Manufacturing activity 90 USD indexed to exchange rate basket May – Nov – US Sept – Greek US Purchasing managers’ index, 50 = no change Quantitative Lehman rescue QE2 60 Easing fail
Slide 10: Strong emerging market growth will continue
STRONG EMERGING MARKET GROWTH WILL CONTINUE GROWING MIDDLE CLASS IN EMERGING CHINA AND US WILL CONTINUE TO DRIVE ECONOMIES WILL CONTINUE TO DRIVE DEMAND INFRASTRUCTURE GROWTH Middle Classes by region, million US$ billion, constant 2005 prices and exchange rates 1000 Investment in infrastructure 900
Slide 11: World steel production will continue to grow
WORLD STEEL PRODUCTION WILL CONTINUE TO GROW Crude Steel Output Forecast Steel Consumption Forecast 2,000 800 North America 700 Europe China CIS 1,500 600 In Million tonnes India in Million tonnes Other 500 1,000 400 300 500 200 100 0 0 2010F 2011F 2012F 2013F 2014F 2015F 2007 2008 2009 2011F 2012F
Slide 12: China driving demand and use of higher quality materials
CHINA DRIVING DEMAND AND USE OF HIGHER QUALITY MATERIALS URBANISATION IN CHINA WILL DRIVE DEMAND …WITH A GREATER FOCUS ON HIGH QUALITY FOR OUR KEY METALS AND MINERALS MATERIALS Continued urbanisation in China, in context of GDP growth, Chinese share of global stainless steel consumption increasing d
Slide 13: Anglo American's quality iron ore business
ANGLO AMERICAN’S QUALITY IRON ORE BUSINESS
Slide 14: Anglo American's iron ore growth story
ANGLO AMERICAN’S IRON ORE GROWTH STORY Anglo American’s iron ore assets have the potential to produce in excess of 150 Mtpa by 2020 • Projects currently in implementation or Current and Potential Iron Ore Production – 100% approved will result in ~80 Mtpa production • Ramp-up and Conceptual projects
Slide 15: Anglo American has a unique iron ore footprint
ANGLO AMERICAN HAS A UNIQUE IRON ORE FOOTPRINT Thabazimbi Amapá 2 State 2 Sishen Mine and 1 Kolomela Minas Gerais State Santana Port 1 Saldanha 525km Port Slurry Pipeline Açu Rio de Janeiro State Port Kumba Iron Ore Minas-Rio Amapá 2009 Production 41.1 Mt Target Prod. (Phase 1) 26.5 Mtpa 2010 Produc
Slide 16: South Africa: current operations – Sishen
SOUTH AFRICA: CURRENT OPERATIONS – SISHEN • Kumba Iron Ore (KIO) (65.3% owned by Anglo American) • Northern Cape province of South Africa • One of the largest open-pit mines in the world • Produced 43.1 Mt in 2010 • Very high quality lump ore with outstanding physical properties 16 Source: Kumba Iro
Slide 17: South Africa: project developments – Kolomela
SOUTH AFRICA: PROJECT DEVELOPMENTS – KOLOMELA • Kolomela 9 Mtpa iron ore project on schedule for first production Q2 2012 • At full capacity the mine will deliver 9 Mtpa of high quality seaborne iron ore • Expected to operate in the lower half of the cost curve 17 Source: Kumba Iron Ore; Anglo Ameri
Slide 18: Brazil: current operations – Amapá
BRAZIL: CURRENT OPERATIONS – AMAPÁ • Located in Amapá state, in North-East Brazil • Fully integrated operation utilising shovel and truck, beneficiation and rail to the Amazon port of Santana • Produced 4.0 Mt of iron ore in 2010 18 Source: Anglo American
Slide 19: Brazil: current project development – Minas-Rio
BRAZIL: CURRENT PROJECT DEVELOPMENT – MINAS-RIO • One of the world’s largest mining projects, acquired by Anglo American in 2007-2008 • Tier 1 asset • Situated in an established iron ore mining area of Brazil • Integrated mine, pipeline and port operations Minas Gerais State • 5.7 Bt resource • 26
Slide 20: Brazil: current project development – Minas-Rio
BRAZIL: CURRENT PROJECT DEVELOPMENT – MINAS-RIO • Anglo has significantly increased Minas Rio’s iron ore resource since the acquisition to 5.7 Bt • Resources consist of two closely located assets: Itapa and Serra do Sapo • Phase 1 plan mines the Serra do Sapo friable resources. • Minas-Rio will be m
Slide 21: Brazil: current project development – infrastructure
BRAZIL: CURRENT PROJECT DEVELOPMENT – INFRASTRUCTURE PIPELINE PORT • Initial underground 26 inch diameter • 100% owned by LLX Minas-Rio – 49% slurry pipeline with 26.5Mtpa capacity Anglo American; 51% LLX SA • Well-tested logistics method in Brazil • Anglo American managing port built by highly expe
Slide 22: Brazil: current project development – progress
BRAZIL: CURRENT PROJECT DEVELOPMENT – PROGRESS Coagulant / Flocculant Clarifier Thickener Terminal Station Filtering Building Substation • Key components advancing in accordance with schedule for FOOS Q3 2013 • Significant progress with licenses and permits • Engineering and major equipment purchase
Slide 23: Anglo American iron ore - a quality position
ANGLO AMERICAN IRON ORE - A QUALITY POSITION Minas-Rio is a high grade, low contaminant expandable resource 10% Dotted bubble indicates processed ore Bubble size indicates an average production of 50 Mtpa 8% Australia - high quality India Other Africa Alumina + silica content CIS 6% Australia - medi
Slide 24: Anglo American iron ore trade flows
ANGLO AMERICAN IRON ORE TRADE FLOWS Unique iron ore geographic footprint in Brazil and South Africa. Iron ore in Australia would complement existing production and provide blending opportunities to service clients in Asia. ? 24
Slide 25: Conclusion
CONCLUSION • Ambition to become the leading global mining company • Global footprint • Diversified portfolio across the most attractive commodities • Strong financial position • Significant existing high quality iron ore production • Strong project pipeline towards 150mtpa • Looking to grow our posi
Slide 26: The leading global mining company
THE LEADING GLOBAL MINING COMPANY EMPLOYER OF CHOICE PARTNER OF CHOICE INVESTMENT OF CHOICE
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