Antofagasta Plc · LSE:ANTO
Antofagasta — H1 2023 Earnings Presentation
38 slides from Antofagasta's earnings presentation, Aug 10, 2023
Slide 1: Developing mining for a better future: Half Year 2023 Results
Developing mining for a better future Half Year 2023 Results 10 August 2023
Slide 2: Cautionary statement
Cautionary statement This presentation has been prepared by Antofagasta plc. By reviewing and/or attending this presentation you agree to the following conditions: This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Exampl
Slide 3: Agenda
Agenda 1 Overview 2 Financial review 3 Sustainability performance 4 Growth opportunities Antofagasta plc | 2023 Half Year Results 3
Slide 4: Overview
Overview H1 2023 Results Iván Arriagada | Chief Executive Officer 4 Image: Los Pelambres’ Integrated Remote Operations Centre in Santiago, inaugurated in H1 2023.
Slide 5: Highlights: H1 2023
Highlights: H1 2023 Earnings per share increase by 27% Safety performance EBITDA 0 Fatalities $1.3bn -43% High Potential Incidents (+8%) -30% Lost Time Injury Frequency Rate Copper production Earnings per share Revenue +10% +27% $2.9bn (295.5kt) (33.5 cents) (+14%) 160 litres/second Desalinated wate
Slide 6: Updated full year guidance
Updated full year guidance (as previously announced) Commissioning of Los Pelambres’ expansion in H2 2023 Copper production 2023 Group production (kt) 640-670,000 tonnes ‒ reflects completion of the desalination Revised FY Guidance plant and concentrator expansion in H2 2023. 640-670 345 - 375 Produ
Slide 7: Current fiscal events in Chile: new mining royalty approved
Current fiscal events in Chile New mining royalty approved MINING ROYALTY • In May 2023, both Chile’s Senate and lower house of Congress passed the proposed mining royalty, with Presidential approval expected shortly. • New royalty comprises a 1% ad valorem royalty and royalty on operating profits,
Slide 8: Copper market: long term fundamentals supportive of future prices
Copper market Long term fundamentals supportive of future prices NEAR TERM OUTLOOK DEMAND OUTLOOK (LONGER TERM) • Recent decline in global demand and economic outlook in • Global shift towards decarbonization and growth in clean China. Expectations for China to announce additional stimulus electrici
Slide 9: Financial Review
Financial Review H1 2023 Results Mauricio Ortiz| Chief Financial Officer 9 Image: Desalination plant at Los Pelambres.
Slide 10: Financial highlights: H1 2023
Financial highlights: H1 2023 EBITDA increases 8% to $1.3 billion Revenue Net cash costs EBITDA Net debt/EBITDA U$B +14% c/lb U$B -4% +8% 0.4 -10% 2.9 182.1 1.33 0.2 0.30 2.5 175.1 1.24 0.27 0.0 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 FY 2022 H1 2023 • Reflecting rising copper • Cash cost re
Slide 11: Operating performance: H1 2023
Operating performance: H1 2023 10% increase in Group production Los Pelambres Centinela Antucoya Cu production 128.5 kt Cu production 109.2 kt Cu production 38.0 kt Net cash costs $1.17/lb Net cash costs $1.88/lb Net cash costs $2.72/lb 1 Zaldívar Transport Cu production1 19.8 kt Tonnage transported
Slide 12: Production and cash costs
Production and cash costs Production growth as water shortage progressively recedes COPPER PRODUCTION 7.4 0.3 295.5 kt 19.4 1.5 268.6 kt (1.8) H1 2022 Grades Throughput Recovery Work-in-progress ROM/Others H1 2023 & inventories CASH COSTS External: $0.16/b Controllable: -$0.05/b 0.19 0.16 $2.48/lb $
Slide 13: EBITDA: resilient EBITDA margin
EBITDA Resilient EBITDA margin $ million and %1 49% (3) ppt 46% $93m 348 7 (165) (11) (27) 1 $1,331m (61) $1,238m HY 2022 Sales Realised Mining costs Exploration Non operating Associates Transport HY 2023 EBITDA2 volumes prices & evaluation expenses & & JVs division EBITDA2 corporate cost 1 Margin c
Slide 14: Strong balance sheet maintained
Strong balance sheet maintained Net debt/EBITDA 0.27x $ million $65m 1,285 11 (323) 945 $(886)m $(821)m (1,022) (18) (17) (498) (299) Net cash EBITDA from Working Tax Capex Net interest Other Dividends Others Reko Diq Net cash / / (debt) subsidiaries 1 capital non-cash (debt) Dec 2022 movements June
Slide 15: Capital allocation framework
Capital allocation framework Consistent shareholder returns policy CONSISTENT APPROACH TO CAPITAL ALLOCATION INVESTMENTS AND SHAREHOLDER RETURNS Capex OPERATING CASH FLOW U$B 1.8 1.9 1.9 CAPITAL OUTFLOW 1.3 SUSTAINING CAPEX & MINE DEVELOPMENT 0.9 1.0 COMMITTED DIVIDENDS (35% PAY-OUT) 2018 2019 2020
Slide 16: Sustainability performance
Sustainability performance H1 2023 Results René Aguilar| Vice President of Corporate Affairs and Sustainability 16 Image: View across the Choapa Valley, central Chile.
Slide 17: Safety and health
Safety and health A safe working environment for everyone Safety performance: Fatalities, HPI and LTIFR Fatalities High Potential Incidents (HPI) 316 Lost Time Injury Frequency Rate (LTIFR)1 219 86 65 1.6 42 13 1.3 1.0 0.9 0.8 0.6 1 1 Image: Members of the maintenance team at Centinela’s workshops.
Slide 18: Addressing Climate Change: Water
Addressing Climate Change: Water Focused on responsible water sourcing LOS PELAMBRES: JOURNEY UNDERWAY TO 90% SEA WATER OR WATER WITHDRAWALS (GL) RECIRCULATED WATER • Construction of Los Pelambres’ Phase 1 (400l/s) desalination plant completed and ramp up underway. • Average of 160l/s of desalinated
Slide 19: Addressing Climate Change: Emissions
Addressing Climate Change: Emissions Committed to emissions reduction CO2 emissions intensity1,2 CO2 emissions composition tCO2e / tCu Scope 1 92% Scope 2 3.33 3.10 2.79 2.56 1.75 2018 2019 2020 2021 2022 Emissions reduction journey continues Focus on key areas of emissions • Scope 1 and 2 emissions
Slide 20: Global Industry Standard on Tailings Management
Global Industry Standard on Tailings Management1 On track to meet disclosure requirements TIMELINE: DEVELOPMENT OF GISTM GISTM: INDUSTRY BEST PRACTICE • Standard developed by the International Council on Mining and PUBLICATION: AUGUST 2020 Metals (“ICMM”), the United Nations Environment Programme •
Slide 21: Suppliers for a better future programme
Suppliers “Suppliers for a better future” programme PROGRAMME PILLARS AND CHALLENGES • People: Female participation in supplier companies and hiring of local labour. • Sustainability: Joint plans between Antofagasta and suppliers to reduce CO2 emissions. • Local development: Joint work with large su
Slide 22: Growth pipeline
Growth pipeline 2023 Half Year Results Iván Arriagada| Chief Executive Officer 22 Image: View of the Company’s concentrator at Centinela, northern Chile. Antofagasta plc | 2023 Half Year Results
Slide 23: Pipeline for growth to 900,000tpa of copper production
Reliable and responsible copper producer Pipeline for growth to 900,000tp.a. of copper production 120 ktpa Cu 50 ktpa Cu 35 ktpa Cu Sized to 50 ktpa for illustrative 15 ktpa Cu purpose only Encierro Cachorro Centinela 2nd Concentrator Los 900ktpa Phase 2 Centinela 2nd Pelambres target once Portfolio
Slide 24: Growth update: Los Pelambres (Phase 1)
Growth update: Los Pelambres (Phase 1) Major projects on track for delivery in H2 2023 Desalination Plant Fourth Concentrator Line • Mechanical Construction completed H1 2023. • Project to lift plant nameplate capacity from 175ktpd to • Nameplate capacity: 400 litres per second, with 190ktpd. averag
Slide 25: Centinela Second Concentrator: developing a Tier 1 mining district
Centinela Second Concentrator: Processing Developing a Tier 1 mining district PROJECT TIMELINE Oxide Operations • Updated studies to be submitted to the Board for consideration by end-2023. Tailings facility PROJECT SCOPE (existing) • Second concentrator to unlock the potential of Esperanza Sur Espe
Slide 26: Looking forward into H2 2023
Developing mining for a better future Looking forward into H2 2023 • Safety first culture: Continue to prioritise strong safety performance. • Deliver on growth projects: Commission Los Pelambres’ desalination plant and 4th concentrator line. • Deliver guidance: Quarter-on-quarter growth in producti
Slide 27: Developing mining for a better future
Developing mining for a better future Half Year 2023 Results 10 August 2023
Slide 28: Appendix
Appendix 28 Image: Haul truck at Los Pelambres.
Slide 29: At a glance
At a glance Antucoya Group • 70% owned • 65% owned by Luksic Group, 35% free float • Copper production1: 79,200 t • Market cap: $19.6 billion (24 July 2023) • Remaining mine life2: 21 years • FTSE 100 • Reserves3: 717.6 million t @ 0.31% Cu Mining division1 Centinela • 70% owned • Top 10 copper prod
Slide 30: Revenue
Revenue $ million $362m 153 7 $2,890m (31) 316 $2,528m (83) HY 20221 Copper price Copper sales By-products TC/RC Transport division HY 20231 1 Excludes Zaldívar and JVs Antofagasta plc | 2023 Half Year Results 30
Slide 31: Net earnings
Net earnings $ million $70m 154 (22) 19 2 (50) $330m (33) $260m HY 2022 EBITDA from Depreciation and Associates Net Tax Non-controlling HY 2023 Net earnings subsidiaries 1 amortisation and JVs finance costs 2 interests Net earnings 1 Excludes Associates and JVs’ EBITDA 2 Includes foreign exchange ad
Slide 32: Cash flow
Cash flow $ million $(42)m 1,285 11 (323) $2,391m 945 $2,350m (1,022) (18) (146) (498) (276) Cash at EBITDA from Working Tax Capex Net Net Div. to Others Reko Diq Cash at 30 1 Jan 2023 subsidiaries capital interest borrowings PLC Jun 2023 received shareholders Antofagasta plc | 2023 Half Year Result
Slide 33: 2023 HY production cost breakdown
2023 HY production cost breakdown $/lb 0.81 $3.04/lb Energy Labour 0.73 $2.48/lb 11% 13% Others 7% (0.25) $1.75/lb Other inputs 9% $1,979m 31% Services 6% Sulphuric acid 8% Fuel and Lubricants 14% Materials and spare parts Net cash costs By-products Gross cash TC/RC & Mine Production H1 2023 credits
Slide 34: Production and metals prices
Production and metals prices Group production Metal prices 2019 2020 2021 2022 HY 2023 2023E1 2019 2020 2021 2022 HY 2023 Copper ('000 tonnes) Copper ($/lb) Los Pelambres 363.4 359.6 324.7 275.0 128.5 320-335 Realised 2.75 2.98 4.37 3.84 3.99 Centinela Concentrates 195.5 153.5 185.4 149.3 74.2 LME 2
Slide 35: Unit cash costs
Unit cash costs Group cash costs 2019 2020 2021 2022 HY 2023 2023E1 Group cash costs ($/lb) Los Pelambres 1.40 1.27 1.59 1.84 2.04 1.85 Centinela 1.83 1.85 1.87 2.44 2.82 2.55 Antucoya 2.17 1.82 2.04 2.50 2.72 2.45 Zaldívar3 1.75 1.80 2.39 2.39 2.96 2.70 Cash costs before by-products credits ($/lb)
Slide 36: Reserves and resources as of December 2022
Reserves and resources as of 31 December 2022 Attributable Tonnage Tonnage (millions tonnes) Copper (%) Molybdenum (%) Gold (g/t) (millions tonnes) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Ore reserves Los Pelambres 905.5 956.1 0.59 0.59 0.020 0.020 0.048 0.049 543.3 573.7 Centinela Concent
Slide 37: Antofagasta contacts
Antofagasta contacts Rosario Orchard rorchard@antofagasta.co.uk Robert Simmons rsimmons@antofagasta.co.uk Director, London Office Tel: +44 20 7808 0988 Investor Relations Manager Tel: +44 20 7808 0988 Antofagasta plc | 2023 Half Year Results 37
Slide 38: www.antofagasta.co.uk
www.antofagasta.co.uk Antofagasta plc | 2023 Half Year Results 38