African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — Mining Indaba 2014
21 slides from African Rainbow Minerals's conference presentation, Feb 4, 2014
Slide 1: Mining Indaba 4 February 2014
Mining Indaba 4 February 2014 We do it better Chief Executive Officer: Mike Schmidt 1
Slide 2: Continuing to focus on cost control and quality growth
Continuing to focus on cost control and quality growth. 2
Slide 3: Disclaimer
Disclaimer Certain statements in this report constitute forward looking statements that are neither reported financial results nor other historical information. They include but are not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, pla
Slide 4: African Rainbow Minerals (ARM)
African Rainbow Minerals (ARM) Listing information Primary listing JSE Limited (ticker ARI) Share price ZAR 212.10 per share Market capitalisation ZAR 45.9 billion Market capitalisation (at an exchange rate of R10.83/US$) US$ 4.2 billion Average daily volume traded in preceding 12 411 636 shares per
Slide 5: ARM group structure
ARM group structure 100% 100% 10% 51% 100% 100% 15% Gold: Platinum Ferrous Coal Copper Exploration Harmony PGMs Iron Ore Coal Copper PGMs 41.5% Modikwa 1 50% Khumani 20% Participating Coal 40% Lubambe and 55% Two Rivers 2 50% Beeshoek Business Lubambe Extension Manganese Ore Nickel, PGMs & Chrome Ma
Slide 6: Revenue composition by commodity
Revenue composition by commodity F2012 revenue split F2013 revenue split Nickel Copper Nickel 0% 9% 11% Platinum 19% Iron Ore Iron Ore 39% Platinum 44% 21% Coal 4% Coal Chrome 5% 6% Chrome Manganese 5% Manganese 18% 19% PGM, nickel and coal headline earnings contribution increased in F2013. 6
Slide 7: Earnings and dividends
Earnings and dividends Headline earnings per share and dividends per share (cents per share) 2 500 Headline earnings per share Dividends per share 2 000 1 735 1 585 1 615 1 500 1 094 1 000 807 450 510 500 475 175 200 0 F2009 F2010 F2011 F2012 F2013 Dividend cover 6.3 X 4.0 X 3.5 X 3.4 X 3.4X As a gl
Slide 8: ARM strategy
ARM strategy Quality growth Operational continues in efficiencies ARM’s portfolio of commodities Acquisitions and Africa partnerships Entrepreneurial Owner operator Profit focused Partner of choice management World-class Responsible community Employer of choice management team development 8
Slide 9: Operational efficiencies
Operational efficiencies ARM’s objective is to have its operations positioned below the 50th percentile on the global cost curve. Two Rivers Platinum Goedgevonden Coal Khumani Iron Ore Manganese Ore Manganese Dwarsrivier Modikwa Platinum Smelters Chrome Ore Beeshoek Iron Ore Nkomati Nickel Lubambe C
Slide 10: Safety record
Safety record Lost Time Injury Frequency Rate (LTIFR) per 200 000 man hours worked 2.50 2.00 1.50 1.00 0.50 0.00 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 3 month moving average 12 month moving average There were no fatalities at any of the ARM managed mines in F2013. 10
Slide 11: EBITDA margins
EBITDA margins The ARM F2013 average EBITDA margin was 36% (F2012: 37%) 60% Iron Ore 55% 42% Coal 45% 25% Manganese 28% 25% Platinum 28% 2% Nickel 26% -5% Chrome -4% -30% -10% 10% 30% 50% 70% F2012 F2013 Increase in EBITDA margins for coal, manganese, platinum and nickel. 11
Slide 12: Update on growth projects
Update on growth projects The iron ore mines have ramped up to steady state production. The Nkomati Nickel Mine achieved a significant turnaround increasing production by 66% to 23 220 tonnes of nickel and reducing costs by 42% to US$ 4.98/lb. The Lubambe Copper Mine commissioned its concentrator pl
Slide 13: Future growth projects
Future growth projects • Iron ore expansion beyond 16 mtpa • Manganese ore expansion beyond 3 mtpa • Expansion of Modikwa Platinum Mine • Lubambe Copper Extension Area • Exploration with Rovuma Resources • Thermal coal projects 13
Slide 14: Transnet's Market Demand Strategy
Transnet’s Market Demand Strategy Manganese Division Coal Division Nchwaning & Gloria Mines Goedgevonden Impunzi And Tweefontein Mines Gauteng Maputo Port North West Johannesburg Mpumalanga Kimberly Iron Ore Division Free State KwaZulu-Natal Beeshoek & Khumani Richards Bay Iron Ore Mines Lesotho Coa
Slide 15: ARM Copper: Extension Area
ARM Copper: Extension Area Total resource (indicated + inferred) Vale/ARM JV AMEC Description estimate statement Variance % change 2010 Feb 2013 Resource tonnage Mt 75.70 105.00 29.30 39% Total Copper grade % 2.81 3.66 0.85 30% Acid soluble Copper grade % 0.91 0.59 (0.32) (35%) Cobalt grade % - 0.09
Slide 16: Projects pipeline and operations
Projects pipeline and operations Exploration to Project development Steady state Declining feasibility and ramp-up (>15 years life-of-mine) operations Beeshoek Iron Ore Mine Thermal coal mines Manganese and chrome smelters Manganese ore mines Two Rivers Platinum Mine Modikwa Platinum Mine Nkomati Ni
Slide 17: Capital expenditure
Capital expenditure Capital expenditure (R million)* 5 000 4 500 4 321 4 000 3 494 3 489 3 500 2 850 2 900 3 000 2 700 2 500 2 000 1 500 1 000 500 0 F2011a F2012a F2013a F2014e F2015e F2016e ARM Platinum ARM Ferrous ARM Coal ARM Copper *The forecasted capital expenditure for F2015 to F2016 is an est
Slide 18: Mergers and Acquisitions
Mergers and Acquisitions ARM continues to focus on value adding acquisitive growth. ARM’s robust financial status, positions it favourably to pursue value adding acquisitions. 18
Slide 19: Exploration in Africa
Exploration in Africa ARM Exploration is focused on identifying, acquiring, exploring and evaluating new geological targets in Africa. Exploration during F2013 focused on the integration and interpretation of all previously gathered data in Northern Mozambique through the joint venture with Rovuma R
Slide 20: Financial position
Financial position EBITDA excluding exceptional items Cash on statement of financial position R million R million 8 000 7 230 5 000 4 632 7 000 6 517 6 531 4 000 3 513 3 668 3 564 6 000 3 039 5 000 4 484 3 000 3 907 4 000 3 000 2 000 2 000 1 000 1 000 0 0 F2009 F2010 F2011 F2012 F2013 F2009 F2010 F2
Slide 21: Thank you
We do it better FaxrM African Rainbow Minerals ES Se es Thank you 21