Anglo American Plc · LSE:AAL
Anglo American — Investor Presentation (October 2023)
39 slides from Anglo American's investor presentation, Oct 3, 2023
Slide 1: Dr. Alexander Schmitt, Chief Marketing Officer, Crop Nutrients
Dr. Alexander Schmitt Chief Marketing Officer, Crop Nutrients 3 October 2023
Slide 2: Cautionary statement
Cautionary statement Disclaimer: This document has been prepared by Anglo American plc (“Anglo American”) and comprises the written Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be materials/slides for a presentation co
Slide 3: We are fast reaching the limit of what existing fertilisers can do
We are fast reaching the limit of what existing fertilisers can do. And many fertiliser practices are causing widespread environmental damage Our planet cannot continue on the same path A different approach is required if we are to sustainably feed 10bn people by 2050 The industry is on the cusp of
Slide 4: Global market reach & experience
Global market reach & experience Large, sophisticated scientific research program Experience in Global market reach development 1,800+ demonstrations 80+ crops trialled 40+ agronomists 43 countries Technical & Customer innovative centric Wide-reaching commercial strategy Anglo American 4
Slide 5: Smart crop nutrition with POLY4
Smart crop nutrition with POLY4 The industry Our product Our strategy The opportunity Anglo American 5
Slide 6: The fertiliser industry challenge
The fertiliser industry challenge Anglo American Cabbage harvest at POLY4 demonstration 6
Slide 7: Fertilisers are fundamental to food security
Fertilisers are fundamental to food security Natural nutrient cycle Farming nutrient cycle Nature provides plants with 17 essential Humans have turbocharged this process with nutrients in perfect balance for healthy chemically manufactured fertilisers growth Focusing only on the 3 biggest nutrients
Slide 8: Industry recognises we are reaching the limit of what existing fertilisers can do
Industry recognises we are reaching the limit of what existing fertilisers can do Fertiliser Cereal nutrients (Mt) production (Bt) 200 3.0 Arable land1 Cereal production1 2.5 60% increase Widening Nutrient tonnes2 150 required in food gap needs 2.0 production by a solution 2050 100 1.5 1.0 15% decre
Slide 9: Industry, governments & consumers are recognising the need for change
Industry, governments & consumers are recognising the need for change State of global soil degradation3 “37% of global greenhouse gases “60 harvests left due to loss of topsoil” caused by food production” Food and Agriculture Organisation of the United Nations New Scientist “Up to 40% of global land
Slide 10: What is crop nutrition?
What is crop nutrition? Plants need balanced nutrition Limited by scarcest nutrition available Plant nutrition • Plants need all key nutrients for healthy growth – every nutrient plays a vital role Macro nutrients • Right quantity, right nutrients, at the right time, in N P K the right place Liebig'
Slide 11: Farmers are constrained by existing fertiliser products
Farmers are constrained by existing fertiliser products Ammonia AN Other - Ca AS CAN • Fertiliser products provide nutrients SSP • Nutrient demand is growing, but farmers are TSP CAN constrained by existing fertiliser products • Product choice is influenced by several factors: Ca • Product value-in-
Slide 12: POLY4: A better solution
POLY4 A better solution Anglo American 12
Slide 13: POLY4 sits at the intersection of global, industry & environmental megatrends
POLY4 sits at the intersection of global, industry & environmental megatrends Environmental responsibility Existing fertilisers CO2 intensive Increased food demand Environment Minimising waste streams Organic product desirability +2bn people by 2050 Low carbon4 & waste, organic Higher calorific dema
Slide 14: POLY4: Multiple key nutrients in a single granule
POLY4: Multiple key nutrients in a single granule A naturally occurring, single source of key nutrients from a distinct, low-chloride mineral POLY4 is not just a potassium source N P K S Mg Ca M+1 -Cl2 MOP SOP SOPM 1. Micronutrient traces in borehole samples 2. Low chloride Anglo American 14
Slide 15: Why is this good for farmers?
Why is this good for farmers? Year 1: Wheat Year 2: Wheat Year 3: Potato Substituting POLY4 into the fertiliser programme delivers: • 13% more nutrients • One less field application (less soil compaction, ~$15 cost saving for each pass of the field) • Two fewer products Spread Grow Harvest Spread Gr
Slide 16: Benefits beyond the nutrients: a better holistic solution for farmers
Benefits beyond the nutrients: a better holistic solution for farmers What matters to farmers POLY4 1. Maximising yield & ROI 1. 3-5% yield uplift5 2. Flexible in-field application 2. Sustained release, granules 3. Minimising leaching 3. Nutrient-use efficiency 4. Improving crop quality & health 4.
Slide 17: Yield: a trial example
Yield: a trial example 1. POLY4 delivers an average 3-5%5 increase in crop yield Yield: tonnes of crop per area The trial European potato trial of land – a key driver in 5% yield increase (t/ha)6 Potatoes grown substituting POLY4 increasing food production & against like-for-like control cases using
Slide 18: Superior in-field application
Superior in-field application 2. POLY4 - better for plant, better for farmer – sustained nutrient release profile provides flexibility & convenience in fertiliser application Legacy fertiliser Common fertilisers have short nutrient release profiles = more nutrient loss, less flexibility Common ferti
Slide 19: Improved nutrient uptake by plant
Improved nutrient uptake by plant 3. Better nutrient uptake by the plant means less fertiliser loss Nutrient-use efficiency: ability of % increase6 in nutrient uptake vs MOP blend crops to take up & utilise available nutrients. A low nutrient-use efficiency results in nutrient losses to N +7% the en
Slide 20: Balanced nutrition for a healthier plant
Balanced nutrition for a healthier plant 4. The right balance of nutrients helps plants’ resilience to drought & disease Drought resilience6 Soyabean trial5 in Brazil: Disease resilience6 Longer, better-quality root By increasing calcium development with POLY4 The sustained calcium release from POLY
Slide 21: Better for the environment
[OFFICIAL] Better for the environment 5. POLY4 is positioned for the shift to better fertiliser practice & low emission food consumption Organic Low carbon Reduced pollution • Compatible with organic & • Simple production & transport • Increases plant uptake of N & P – regenerative farming processes
Slide 22: Protecting a farmer's greatest asset – soil
Protecting a farmer’s greatest asset – soil 6. POLY4 promotes better soil quality POLY4 enhances soil quality6 • Balanced nutrition supports higher crop biomass, adding to soil organic matter • Calcium can improve resilience to soil compaction & reduces nutrient run-off • Higher soil & seeding compa
Slide 23: Our commercial strategy
Our commercial strategy Anglo American 23 Crop Nutrients at Cereals Event 2023
Slide 24: A growing nutrient market
A growing nutrient market Annual global fertiliser market of 180m nutrient tonnes7 180Mt total nutrient consumption today, growing POLY4 addressable market to ~250Mt by 2050, fastest growing is potassium Potassium & other nutrients represent one-third Other of today’s market, addressable by POLY4
Slide 25: Global reach, high quality partners
Global reach, high quality partners North America Europe Top 5 global agri partner One of the largest agribusinesses in Europe Market leading logistics Growth strategies tied to POLY4 Growth strategies tied to Advanced, knowledgeable market with existing use POLY4 of high value, multi-nutrient produ
Slide 26: Getting closer to the farmgate
Getting closer to the farmgate Distribution partners Engagement optimised, strategic agendas aligned Value chain partners Deeper engagement with distributors, retailers, co-operatives, blenders and manufacturers (350+ engagements) Influencers Primary distribution partners 500+ engagements with unive
Slide 27: Innovative downstream activation
Innovative downstream activation Understanding product performance 1 Agronomic foundation • • >1,800 on-field demonstrations Robust technical base Segmentation & specific activation 2 Farmer engagement • • Segment growers Optimise service / product portfolio Channel / influencer-based activation 3 I
Slide 28: Unlocking the full potential of POLY4
Unlocking the full potential of POLY4 Anglo American 28
Slide 29: Modelling POLY4 price
Modelling POLY4 price Nutrient content & blend substitution 1 No extra cost to farmer Yield Value for 2 product benefits Application Nutrient uptake Crop health Organic Value for 1 3 sustainability benefits Low carbon4 Soil Anglo American 29
Slide 30: Nutrient build-up pricing
Nutrient build-up pricing Calcium Calcium: granular calcium reference price, adjusting for calcium content ~10% Magnesium Magnesium: Kieserite (magnesium & sulphur source), adjusting for magnesium ~10% content & removing sulphur value Sulphur Sulphur: Ammonium sulphate (sulphur & nitrogen source) re
Slide 31: Blend substitution implies $170/t POLY4 price for the same nutrients at no extra cost
Blend substitution implies $170/t POLY4 price for the same nutrients at no extra cost to farmer Nutrients in standard cereal NPK blend using typical existing fertiliser products9 N P K S Cl Standard Blends purchased according to required nutrients Blend 15 15 15 6 12 Standard cereal NPK blend uses 4
Slide 32: POLY4 delivers significant benefits beyond its nutrient content – taking yield as an example
POLY4 delivers significant benefits beyond its nutrient content – taking yield as an example European potato trial showed 5% yield uplift with POLY46 Global average6 Additional 2t of 36 37 Farmer potatoes/ha +3-5% crop yield5 yield 35 Farmer Typical NPK program Typical NPK program POLY4 program prof
Slide 33: Unlocking the full value potential of POLY4
Unlocking the full value potential of POLY4 Long-term price forecast at 13Mtpa Product quality Sustainable Nutrient value & performance solution Indicative price Significant Organic upside Low carbon footprint4 potential Improved soil health 3-5% yield increase Granular product Nutrient-use efficien
Slide 34: Commercial strategies: focus on high value demand
Commercial strategies: focus on high value demand Customer-centric innovation Product Enabling activity for demand creation differentiation Product Target the wider market: products to address performance demand into N / P Cost Capture value of product’s premium leadership quality & performance $170
Slide 35: Wrap up
Wrap up Anglo American 35
Slide 36: Smart crop nutrition with POLY4
Smart crop nutrition with POLY4 Strong delivery Industry needs capabilities & Unlocking the full something new A superior future- robust commercial potential of POLY4 enabling product strategy Anglo American 36
Slide 37: Appendix
Appendix Anglo American 37 Spinach harvest at POLY4 demonstration
Slide 38: Nutrient build-up components
This information is provided as one Using spot prices: Nutrient build-up components example of a method to value the MOP = $390/t individual components of POLY4 SOP = $545/t nutrients. It is not intended as a guide to AS = $284/t pricing POLY4, & should not be relied Urea = $395/t upon as an estimat
Slide 39: Footnotes
Footnotes 1. Source: FAO (Food and Agriculture Organization of the United Nations). 2. Source: IFA (International Fertilizer Association) 3. Source: WWF Living Planet Report, 2016. 4. Relative to comparable fertiliser products. 5. Observed yield increase in studies compared to conventional fertilisa
Anglo American — Investor Presentation (October 2023) on 6ix