Valterra Platinum Limited · JSE:VAL
Valterra Platinum — Investor Day (February 2021)
72 slides from Valterra Platinum's investor day presentation, Feb 22, 2021
Slide 1: Strategy Update
STRATEGY UPDATE 22 February 2021 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo or achievements to differ materially from those in the forward- Certain statistical and other information about American Platinum Limited (“Anglo American Platinum”) and looking statements include, among others, levels of
Slide 3: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 3 CONFIDENTIAL 3
Slide 4: Our Purpose
OUR PURPOSE Re-imagine mining to improve people’s lives 4 OUR PURPOSE
Slide 5: Next phase of value delivery for all stakeholders
NEXT PHASE OF VALUE DELIVERY FOR ALL STAKEHOLDERS 1 The world needs our metals – enabling a greener and healthier future Climate change action will accelerate decarbonisation and demand for our metals Industry leading asset portfolio – our assets in H1 of the cost curve 2 Diverse, high quality and l
Slide 6: Our Strategic Priorities
OUR STRATEGIC PRIORITIES Stimulate new markets and Embed anti-fragility across Maximize value from A leader in leverage new capabilities our business our core ESG Our values Safety Integrity Collaboration Care and respect Accountability Innovation Our Culture Creating a purpose-led, values-driven an
Slide 7: A new executive team to take the company forward
A NEW EXECUTIVE TEAM TO TAKE THE COMPANY FORWARD Anglo American Group Executive Team Marketing Natascha Viljoen Craig Miller Yvonne Mfolo Prakashim Moodliar Benny Oeyen Chief Executive Officer Finance Director Executive Head: Corporate Executive Head: Projects Executive Head: Market Affairs and Envi
Slide 8: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 8 CONFIDENTIAL 8
Slide 9: The world needs our metals now and to enable a greener and healthier future
THE WORLD NEEDS OUR METALS NOW AND TO ENABLE A GREENER AND HEALTHIER FUTURE Diversified demand for our metals… Industrial Technology Automotive Jewellery Investment Semi-conductors Glass fibre Platinum Base Group Hydrogen production Fuel-cell electric Battery storage metals Metals vehicles …our meta
Slide 10: Medium term demand outlook remains robust
MEDIUM TERM DEMAND OUTLOOK REMAINS ROBUST Annual global light duty automotive production (million vehicles) ICE-based vehicle sales forecast to rise 100 8% globally by 2027 from 2019 levels. Includes hybrid and ICE 80 3E PGM growth due to 60 Contain PGM Higher loadings catalysts 40 as Euro 7/China 7
Slide 11: Long-term PGM demand supported by numerous FCEV drivetrain applications
LONG-TERM PGM DEMAND SUPPORTED BY NUMEROUS FCEV DRIVETRAIN APPLICATIONS Future drivetrain will be mixed, with Weight, kg Bubble size roughly representing the annual energy BEVs & FCEVs consumption of this vehicle type in 2050 BEV FCEV Synthetic fuels 10,000,000 Complementary Shipping 1,000,000 in th
Slide 12: Hydrogen poised for greater adoption globally
HYDROGEN POISED FOR GREATER ADOPTION GLOBALLY Investment in hydrogen Driving down the cost Making H2 mobility competitive continues to grow of hydrogen with low carbon alternatives >200 projects on hydrogen announced worldwide >70 2 $/kg 4-6 $/kg bn USD pledged by Cost per kg at the nozzle at which
Slide 13: What the hydrogen economy could mean for PGM demand
WHAT THE HYDROGEN ECONOMY COULD MEAN FOR PGM DEMAND Fuel cell Potential PGM Application vehicles, % ounces1, ‘000 Mobility Passenger PGM demand (‘000 ounces) ~6.0moz vehicles (m/l) 15 3 400 Heavy duty trucks 50 2 000 Passenger vehicles (small) 5 350 Buses 25 80 2020 2023 2026 2029 2032 2035 Unit of
Slide 14: Market development shapes the business and its environment
MARKET DEVELOPMENT SHAPES THE BUSINESS AND ITS ENVIRONMENT Assemble Generate Scale & Ecosystems Growth Capture Commercial and technology / Proven product / technology and product risks are inherent Commercial risk remains commercials Shape the business New venture Venture-led Research AP Ventures Co
Slide 15: Our market development approach in the hydrogen economy
OUR MARKET DEVELOPMENT APPROACH IN THE HYDROGEN ECONOMY Examples: Discover & assemble 1 new ventures (R&D → New business) …and 10 other H2 companies Deploy & leverage Shape the 2 growth capital Research in fuel cell, Research business (New business → Sustainable business ) and new ventures in electr
Slide 16: We discover and nurture opportunities into demand
WE DISCOVER AND NURTURE OPPORTUNITIES INTO DEMAND From early opportunity area… …to recognised demand segment/ sub-segment Examples of Assemble Generate Scale & Opportunity opportunity areas ecosystems growth capture potential Green hydrogen Moving to scale production & mobility Battery & Storage PGM
Slide 17: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 17 CONFIDENTIAL 17
Slide 18: Anti-fragility underpins the delivery of our strategy
ANTI-FRAGILITY UNDERPINS THE DELIVERY OF OUR STRATEGY Safety FutureSmart MiningTM People Asset integrity and reliability 18
Slide 19: Safety, eliminating fatalities and ensuring zero harm
SAFETY, ELIMINATING FATALITIES AND ENSURING ZERO HARM Eliminating fatalities • We truly believe that all fatalities are preventable and continue to embed this mindset that leads to proactive action to eliminate hazards • Comprehensive safety transformation underway Creating a zero harm Modernising o
Slide 20: Motivated by our purpose: people demonstrating positive change
MOTIVATED BY OUR PURPOSE…PEOPLE DEMONSTRATING POSITIVE CHANGE Workplace Work Unleashing Innovation Organisational Effectiveness automation and analytics for a Designing for a future-fit organisation with modernised digital workplace Culture impact through our operating model Purpose-led Values drive
Slide 21: Our approach to asset management
OUR APPROACH TO ASSET MANAGEMENT Risk-based assessment Approach to maintenance and asset reliability • Asset maturity framework • People – mindset shift towards asset defined to enhance stewardship transparency on asset condition and risk • Technology – applied a suite of reliability tools ‒ Defect
Slide 22: Addressing safety and ESG through FutureSmart Mining
ADDRESSING SAFETY AND ESG THROUGH FUTURE SMART MINING™ Concentrating the Mine™ Water-Less mine Intelligent Mine Modern Mine Increased precision in Reducing our dependence Transforming vast quantities Leverage innovation and mining, with minimal energy, on water and enabling dry of quality data into
Slide 23: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 23 CONFIDENTIAL 23
Slide 24: Operating our integrated value chain at its full potential
OPERATING OUR INTEGRATED VALUE CHAIN AT ITS FULL POTENTIAL Processing Marketing & Exploration Mining Concentrating Smelting Refining market development Leading capabilities, achieving operational excellence and deploying technology Largest precious metals Mineral Resource1 globally, 4e Moz 2020 reve
Slide 25: Mogalakwena – a world class orebody and mine
MOGALAKWENA – A WORLD CLASS OREBODY AND MINE Cost position New prospecting right areas Reserve Resource (Primary producer incorporated into the life1 life1 cash cost curve2) Mogalakwena mining right – drilling to define ore body continues +30 years +152 years Q1 2020 revenue, Basket price % of total
Slide 26: Mogalakwena – a holistic approach to deliver the future of the mine
MOGALAKWENA – A HOLISTIC APPROACH BEING FOLLOWED TO DELIVER THE FUTURE OF THE MINE Maximize value Resource development plan from our core Optimal open-pit plan, including progressing underground opportunities Operational efficiencies (P101) Optimise mine plan and operational performance Expanding co
Slide 27: Mogalakwena – on our path to setting industry benchmark performance
MOGALAKWENA – ON OUR PATH TO SETTING INDUSTRY BENCHMARK PERFORMANCE Mining Target outcomes Rope shovel performance, Truck fleet performance (930E payload), mtpa annualised tonnes per load 26 +77% 298 +8% ~5% 14 292 Reduction in R / ton milled1 2019 2020 P101 2019 2020 P101 benchmark benchmark Concen
Slide 28: Growth through operational excellence and the integrated future of Mogalakwena
GROWTH THROUGH OPERATIONAL EXCELLENCE AND THE INTEGRATED FUTURE OF MOGALAKWENA ~1.9 moz Expansion options ~1.6 moz + 0.3 – 1.2moz 0.6moz PGM moz 0.7moz ~0.5moz R13 – 23bn Project capital expenditure1 1993 2008 2012 2020 2023 23 – 27% South North Operational improvement Low P101 Future of Mogalakwena
Slide 29: Amandelbult – transitioning towards a modernised and mechanised future
AMANDELBULT – TRANSITIONING TOWARDS A MODERNISED AND MECHANISED FUTURE Cost position Dishaba – Reserve Resource (Primary producer modernised life1 life1 cash cost curve2) +20 years +77 years Q4 (potential Q2) Tumela Upper – conventional Tonnes milled, by mining area Tumela Lower – Mechanised moderni
Slide 30: Amandelbult – modernisation and mechanisation fast-tracked
AMANDELBULT – MODERNISATION AND MECHANISATION FAST-TRACKED Maximize value from Modernisation our core Leverage suite of innovations to transition to hybrid mining method, improving safety and productivity Mechanisation Embed narrow reef mining equipment for application in larger future projects Inno
Slide 31: Amandelbult – creating a safer and more productive work environment
AMANDELBULT – CREATING A SAFER AND MORE PRODUCTIVE WORK ENVIRONMENT Conventional mining Modernisation Mechanisation Production profile of Amandelbult, % of PGM production 2020 2022 2030 Unit cost, R / ton milled 2 109 ~1 750 >1 700 Productivity, m2 mined / total 4 ~6 ~8 operating employees Safety 20
Slide 32: Der Brochen – investing to extend Mototolo life of mine
DER BROCHEN – INVESTING TO EXTEND MOTOTOLO LIFE OF MINE Cost position Reserve Resource (Primary producer Mototolo life1 life1 cash cost curve2) Lebowa Mareesburg TSF3 +30 +97 Q2 Mototolo years years Borwa Mototolo Concentrator Tonnes milled, by mining area Der Brochen North Shaft Der Brochen Der Bro
Slide 33: Mototolo / Der Brochen – projects extending life of mine
MOTOTOLO / DER BROCHEN – PROJECTS EXTENDING LIFE OF MINE Maximize value Concentrator debottlenecking from our core Increase throughput from 220 to 240ktpm by debottlenecking hydraulic circuit Der Brochen decline development Develop decline and required infrastructure to access Der Brochen ore body,
Slide 34: Der Brochen – productivity improvement and additional expansion potential
DER BROCHEN – PRODUCTIVITY IMPROVEMENT AND ADDITIONAL EXPANSION POTENTIAL R3.9bn Project capital expenditure1 ~25% Increase in PGM production by 2025 Der Brochen ~20% Opportunity to expand relative to 2020 production will replace productivity1 production from 240ktpm to declining volumes improvement
Slide 35: Unki – large resource with long-term optionality
UNKI – LARGE RESOURCE WITH LONG-TERM OPTIONALITY Cost position Reserve Resource (Primary producer life1 life1 cash cost curve2) +20 +23 Q2 years years Current Unki operation Debottleneck plant Maximize value Concentrator debottlenecking and long-term from our core Complete project to Increase option
Slide 36: Processing assets – maximising the strategic value
PROCESSING ASSETS – MAXIMISING THE STRATEGIC VALUE Our network scale… … Opens up opportunity to capture additional value ore inputs from 4 10+ reef types Energy Product & carbon mix intensity components in 7 processing network Asset utilisation Processing Throughput and recovery Inventory end-produc
Slide 37: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 37 CONFIDENTIAL 37
Slide 38: Despite global recognition, our ambition is to excel in ESG
DESPITE GLOBAL RECOGNITION, OUR AMBITION IS TO EXCEL IN ESG Our ESG efforts are recognised globally Our ambition… We are focused on meeting stringent requirements of the Initiative for Responsible Mining Assurance (“IRMA”) to meet growing customer needs …the preferred investment for ESG rating 4.81
Slide 39: A sustainability-driven company and a leader in ESG
A SUSTAINABILITY-DRIVEN COMPANY AND A LEADER IN ESG Trusted Developing trust, providing ethical value chains and improved corporate leader accountability to the communities we work with • Continue to roll out our industry leading IRMA Standard for Responsible Mining across our assets • Establish Acc
Slide 40: A pathway to shared value for our stakeholders
A PATHWAY TO SHARED VALUE FOR OUR STAKEHOLDERS Stakeholder engagement and participation Stakeholder value protection Stakeholder engagement and Effectively mitigate social, health, human participation that resets the rights and environmental risks and impacts relationships as seen through the eyes o
Slide 41: Our pathway to carbon neutrality by 2040
OUR PATHWAY TO CARBON NEUTRALITY BY 2040 CO2 emissions reduction relative to 2016 baseline1 Potential Progress to date Energy efficiency Initiatives 20-25% 8%2 emission reduction from >30% to reduce energy intensity energy efficiency since 2016 (e.g., steam reticulation optimization) Reduction by 20
Slide 42: Leading the development of an integrated mine decarbonisation solution
LEADING THE DEVELOPMENT OF AN INTEGRATED MINE DECARBONISATION SOLUTION System Architecture We generate renewable electricity which is: Excess energy converted to green hydrogen (H2) Supplied to refuel to mine H2 mine operations trucks Zero carbon mine trucks Enabled by our Power Plant Module, fueled
Slide 43: Agenda
AGENDA Our purpose and strategic priorities PGM market outlook Embedding anti-fragility Maximising value from our core A leader in ESG Value creation 43 CONFIDENTIAL 43
Slide 44: Maintaining production scale and improving margins
MAINTAINING PRODUCTION SCALE AND IMPROVING MARGINS, THROUGH OPERATIONAL EXCELLENCE AND DISCIPLINED INVESTMENT Attributable production from owned mines and JVs, PGM moz Covid-19 adjustment Owned mines JVs ~3.6 3.0 2020 Operational Net growth2 2030 improvements1 1. Operational improvements from P101 2
Slide 45: The strategy will follow disciplined capital allocation
THE STRATEGY WILL FOLLOW DISCIPLINED CAPITAL ALLOCATION Our capital allocation framework Capex, R bn Asset reliability Other SIB3 Approved discretionary capex2 Unapproved discretionary capex2 Balance sheet flexibility 2021 22 23 24 2025 Discretionary capital options1 Continued commitment to dividend
Slide 46: Targeting value creation for our stakeholders
TARGETING VALUE CREATION FOR OUR STAKEHOLDERS 2020 2025 2030 Mechanised and modernised 88% 100% 100% operations, % of PGM production Cost curve position 3 of 4 owned mines in H1 All owned mines in ~H1 Mining EBITDA margin, % 35%2 ~40%3 ~35-45%1,3 ROCE, % 35%2 >30%3 ~25-35%3 5 jobs off site for Commu
Slide 47: In conclusion…
IN CONCLUSION… 47 47
Slide 48: Leveraging our leading capabilities and integrated portfolio to create shared value
LEVERAGING OUR LEADING CAPABILITIES AND INTEGRATED PORTFOLIO TO CREATE SHARED VALUE 1 The world needs our metals – enabling a greener and healthier future Climate change action will accelerate decarbonisation and demand for our metals Industry leading asset portfolio – our assets in H1 of the cost c
Slide 49: Q&A
Q&A 49 49
Slide 50: Appendix
APPENDIX Foundation of our strategy PGM market outlook Our strategy A leader in ESG Value creation 50
Slide 51: Building off a solid foundation from resource to market
BUILDING OFF A SOLID FOUNDATION FROM RESOURCE TO MARKET Processing Marketing & Exploration Mining Concentrating Smelting Refining market development Focused on Open Pit Conventional Smelters Base Metals understanding our Mogalakwena Amandelbult Polokwane Refinery Northern Limb footprint Waterval Mor
Slide 52: Largest precious metals mineral resource globally, with diversified ore bodies
LARGEST PRECIOUS METALS MINERAL RESOURCE GLOBALLY, WITH DIVERSIFIED ORE BODIES Reserve Resource 2020 revenue, Largest precious metals Mineral Resource1 globally, 4e Moz life2 life2 % of total and R bn Pt Rh Cr Cu and other Predominantly PGM resources Predominantly gold resources Pd Ni Cu 800 Mogalak
Slide 53: Industry leading mining asset portfolio of scale
INDUSTRY LEADING MINING ASSET PORTFOLIO OF SCALE Financial performance Cost position (Primary producer ROCE2 EBITDA margin 2019 PGM production, Mining method cash cost curve1) in 2020 in 2020 Moz Mogalakwena Open-pit, mechanised Q1 61% 62% 1.2 Amandelbult Underground, conventional Q4 76% 43% 0.9 (po
Slide 54: Industry leading processing scale and optionality
INDUSTRY LEADING PROCESSING SCALE AND OPTIONALITY Southern African integrated PGM producer capacity, % Optionality across value chain: 8% 10% 18% 8% 4% 11 concentrate inputs1 (own-managed mines, joint operations and 3rd parties) 52% 30% 57% 58% 25% 31% 7 components in processing network Smelting Pre
Slide 55: Distinctive marketing and market development capabilities
DISTINCTIVE MARKETING AND MARKET DEVELOPMENT CAPABILITIES Marketing and trading Market development Our approach to marketing starts with a customer Leadership in PGM market development need and ends with a mutually beneficial solution we provide. Our solutions are centred on: Full capability set f
Slide 56: Appendix
APPENDIX Foundation of our strategy PGM market outlook Our strategy A leader in ESG Value creation 56
Slide 57: Primary PGM supply maintained, but investment is required
PRIMARY PGM SUPPLY MAINTAINED, BUT, INVESTMENT IS REQUIRED Base level of production to fall – capex required to maintain and grow Base production falls by koz PGM production ~5% by 2030 Approved projects increases production by ~3% By 2030 Expansion constrained by Infrastructure & 2021 2022 2023 202
Slide 58: What hydrogen could mean for PGM demand
WHAT HYDROGEN COULD MEAN FOR PGM DEMAND Size of market % fuel cell Number of fuel Size of power Current Thrifted Potential PGM Mobility (per annum) vehicles cell vehicles needs (kW) Loading (g) Loading (g/kW) ounces Heavy duty 4,000,000 50% 2,000,000 250 225 0.13 2,000,000 trucks Buses 400,000 25% 1
Slide 59: Select examples of market development in new materials and battery and storage
SELECT EXAMPLES OF MARKET DEVELOPMENT, IN THE NEW MATERIALS AND BATTERY AND STORAGE OPPORTUNITY AREAS Enabling Material Solutions through new & better Alloys Making PGM’s a BEV’s best friend Digital Technology platforms for PGM alloys Develop the battery of tomorrow while improving the battery of to
Slide 60: Appendix
APPENDIX Foundation of our strategy PGM market outlook Our strategy A leader in ESG Value creation 60
Slide 61: Our strategic priorities are supported by detailed initiatives
OUR STRATEGIC PRIORITIES ARE SUPPORTED BY DETAILED INITIATIVES Stimulate new markets and Embed anti-fragility across Maximize value from A leader in leverage new capabilities our business our core ESG • Facilitate the development of • Eliminate fatalities • Set benchmark performance • Embed ESG at t
Slide 62: Pathway to define and unlock the optimal value from the future of Mogalakwena
PATHWAY TO DEFINE AND UNLOCK THE OPTIMAL VALUE FROM THE FUTURE OF MOGALAKWENA Workstreams defining future Key milestones and production capacity decisions to be taken in late 2021 Optimal open-pit mine design New concentrator design Operational efficiencies (P101) Expansion option Targeted: 1.6-1.9
Slide 63: Mogalakwena – technology development fast-tracked
MOGALAKWENA – TECHNOLOGY DEVELOPMENT FAST-TRACKED Digital platform Bulk-ore Sorter Hydraulic Dry Stacking Coarse Particle Rejection Underground VOXEL is our digital platform Post-crushing sensors Coarse gangue rejection Post primary milling rejection Hard rock cutting to increase that connects asset
Slide 64: Amandelbult – creating a safer and modernised operation
AMANDELBULT – CREATING A SAFER AND MODERNISED OPERATION Split panel layouts Allow buffer times between cycles, creating safer continuous operation and reduced employee exposure Blasting mechanisms Shift to emulsions and throw blasting Winch proximity detection Integration of existing technologies to
Slide 65: Mototolo – ongoing projects to ensure productive and safe operation
MOTOTOLO – ONGOING PROJECTS TO ENSURE PRODUCTIVE AND SAFE OPERATION Concentrator Mareesburg Tailings Chrome Interstage debottlenecking Storage Facility (TSF) Conversion Increase throughput from 220 to 240 ktpm Introduce first lined tailings storage facility Increase chrome recovery with potential by
Slide 66: Principles in how we work with our host communities
PRINCIPLES IN HOW WE WORK WITH OUR HOST COMMUNITIES What will come to define our relationships with host communities Taking time to understand what “meaningful existence” means to each community group Enabling self-organizing communities by capacitating and empowering community leaders Adopting an i
Slide 67: Delivering the goals of our sustainable mining plan
DELIVERING THE GOALS OF OUR SUSTAINABLE MINING PLAN Ongoing initiatives to realise our targets Education • Zimele: Build sustainable livelihoods in host communities through enterprise Ensure schools in host development communities perform within the top 20% of schools provincially • Health: Improve
Slide 68: Our pathway to carbon neutrality by 2040
OUR PATHWAY TO CARBON NEUTRALITY BY 2040 CO2 emissions reduction relative to 2016 baseline1 • Energy efficiency projects • Solar power and • Large-scale renewable adoption across our asset hydrogen fuel cell network powered truck pilot • Replacement of all diesel trucks with fuel cell vehicles 6% 30
Slide 69: Carbon reduction delivers value
CARBON REDUCTION DELIVERS VALUE Economic value Energy security Product differentiation Expected to deliver at least a net Renewable adoption decreases A lower carbon product increases neutral NPV from exposure to supply disruptions • Customer security (All our • Reduced exposure to above customers h
Slide 70: Appendix
APPENDIX Foundation of our strategy PGM market outlook Our strategy A leader in ESG Value creation 71
Slide 71: High-returning growth and replacement options drive near term capex
HIGH-RETURNING GROWTH AND REPLACEMENT OPTIONS AS WELL AS BUSINESS IMPROVEMENT DRIVE NEAR TERM CAPEX Unapproved • Mogalakwena expansion • Der Brochen 240ktpm Unapproved Breakthrough Growth ~0.6 • FutureSmart MiningTM Breakthrough 2.0 – 2.5 1.2 – 1.5 ~0.3 0.4 • Modernisation Lifex ~0.3 Lifex 7.8 – 8.3
Slide 72: Our assets positioned in H1 of the cost curve
OUR ASSETS POSITIONED IN H1 OF THE COST CURVE Primary producer cash cost curve, real $ AISC1/3e oz, 2030 projection Owned mines Peer mines Q1 Q2 Q3 1. All-in sustaining cost Note: Based on consensus analyst prices SOURCE: Anglo American Platinum strategy and company reports 73