Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Day (2015)
17 slides from Norsk Hydro Asa's investor day presentation, 2015
Slide 1: Bauxite & Alumina
Bauxite & Alumina Alberto Fabrini Capital Markets Day 2015
Slide 2: Safety performance improves with operational stability
Safety performance improves with operational stability More than 60% TRI reduction compared to 2012, almost 40% down since 2014 Total recordable injuries (TRI) per million hours worked 5 4.3 4.1 4 3 2.6 2 1.6 1 0 2012 2013 2014 2015 YTD 2
Slide 3: Bauxite & Alumina strategic priorities
Bauxite & Alumina strategic priorities Aiming for operational and commercial leadership • Strive for an injury free • Secure and develop bauxite • Further improve organizational environment resources for future decades capabilities and environmental performance • Continue with operational • Further
Slide 4: Bauxite & Alumina: Lifting performance, securing bauxite supply
Bauxite & Alumina: Lifting performance, securing bauxite supply Ball mill issue resolved Long-term ICMS tax framework Record bauxite production Contributing to local “From B to A” improvement established in Brazil at Paragominas communities in Para program 1 BNOK completed* CMD Mar/ CMD Jul Oct Oct
Slide 5: World-class quality assets
World-class quality assets First quartile alumina cost position and bauxite quality advantage USD/tonne Bauxite quality comparison 400 Alumina content Available Al2O3 % Energy Usage ReactiveSiO2 Reactive silica% 2014 weighted average cash cost USD288/t 300 2015 weighted average cash cost USD263/t Re
Slide 6: Ambitious "From B to A" improvement program delivered
Ambitious “From B to A” improvement program delivered Currency development offsets price effects In NOK billion 3.0 Market effects Actions 2.0 taken 1.0 0.0 -1.0 -2.0 1 Billion NOK -3.0 Improvements delivered* -4.0 2011 Price effect Inflation Raw Other Currency From B to A YTD Q315 Underlying Materi
Slide 7: Paragominas delivering beyond planned cost improvements
Paragominas delivering beyond planned cost improvements From B to A program Production, annualized million tonnes 10.9 11.3 10.2 9.1 9.5 9.1 9.0 8.7 9.0 8.3 7.1 6.0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 3Q15 1Q15* 2Q15* Oct/Nov 2011 2012 2013 2014 2015E 15 Actual Target • Production above nameplat
Slide 8: Alunorte improvement efforts continue
Alunorte improvement efforts continue Stabilized operations – first step towards lifting production From B to A program Reducing production rate variability 6.2 million tonnes through BABS annualized alumina Million tonnes** production Hydrate production boxplot Oct/Nov 7,3 6,6 2011 2012 2013 2014 2
Slide 9: Pricing alumina and bauxite towards own market fundamentals
Pricing alumina and bauxite towards own market fundamentals From B to A program China bauxite imports, volume and price by country USD/tonne CIF 100 80 60 40 20 0 2011 2012 2013 2014 2015E 2009 2010 2011 2012 2013 2014 2015 Actual Target Indonesia Australia India Brazil Guinea Malaysia Bubble size r
Slide 10: Long-term sustaining projects on track
Long-term sustaining projects on track Investments for the next 10-20 years Paragominas tailing dam Alunorte red mud deposit • Investment into further heightening of tailing dam and new tailings • Dry disposal of bauxite residue using press filtration disposal area • Reduces total cost of bauxite re
Slide 11: Paragominas – new mining technologies support future improvements
Paragominas – new mining technologies support future improvements • Debottlenecking to ~11.0 million tonnes/year by 2018 − Minor capex requirement • Use of residual bauxite − Potential to increase Paragominas lifetime by another 4 to 5 years − Improved long-term mine planning and mining accuracy sup
Slide 12: Alunorte – new production technologies and advanced process control to lift production
Alunorte – new production technologies and advanced process control to lift production • Enhanced precipitation process control – improving quality and output • Differential extraction of alumina from bauxite − Potential to achieve a significant reduction in caustic soda usage − Allows for economic
Slide 13: New improvement ambition launched
New improvement ambition launched Further strengthening the competitiveness of first quartile operations Alunorte BNOK 1.0 improvements 2016 – 2019 • Increase production • Improve energy consumption • Reduce fixed costs 500 Paragominas 500 • Support production above nameplate capacity • Improve prod
Slide 14: Shift of alumina sales to index-based pricing continues at full speed
Shift of alumina sales to index-based pricing continues at full speed B&A gain of ~1.1 BNOK if all volume was sold on index at current prices* Sales exposure to index and short term pricing** 35% index 50% index 65% index 75% index 75% index 85% index ~1 mmt net ~2.7 mmt net ~4 mmt net ~5 mmt net ~5
Slide 15: Strengthening aluminium cluster in Pará by lifting equity bauxite production
Strenghtening aluminium cluster in Parã by lifting equity bauxite production Ensuring optimal long-term development of Hydro Alunorte’s second source of high-quality bauxite Alunorte Capacity: 6.6 million tonnes 92% Hydro ownership Hydro entered LoI Albras* with Vale to raise MRN Capacity: 460 000 t
Slide 16: Making progress on ambitious environmental goals
Making progress on ambitious environmental goals Research partnership on biodiversity creates the basis for state-of-the-art approach to mining rehabilitation Rehabilitation gap and schedule Hectares 1200 1000 800 600 • 4 projects: reforestation, big mammals, entomology and fungi • More than 45 rese
Slide 17: Bauxite & Alumina mid-term goals
Bauxite & Alumina mid-term goals Creating shareholder value through efficient and commercial use of raw materials Ambitions Target Timeframe • Improve safety performance, strive for injury free environment TRI <2 2020 • Deliver on new improvement ambition BNOK 1.0 2019 • Lift alumina production at A