Kumba Iron Ore Limited · JSE:KIO
Kumba Iron Ore — Bulks Seminar & Site Visit: Brisbane 2019
21 slides from Kumba Iron Ore's conference presentation, Nov 12, 2019
Slide 1: Kumba Iron Ore
KUMBA IRON ORE Themba Mkhwanazi, CEO Bulks Seminar & Site Visit: Brisbane, 12 November 2019 Rope shovel at Sishen
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: Kumba Overview
KUMBA OVERVIEW 1 Sishen ~31Mtpa 2 Kolomela ~14Mtpa Mining & beneficiation 1 2 Export rail line SOUTH AFRICA Northern Cape Western 3 Cape 3 Saldanha Bay Port 33
Slide 4: Creating Value Through Quality & Efficiency
CREATING VALUE THROUGH QUALITY & EFFICIENCY Operating assets at full Delivering sustainable Leveraging endowment potential returns Our ambitions: Margin enhancement through premium product sales, P101 & cost reductions, offsetting geological inflation 20 year life of asset 44
Slide 5: Safety Is Our Primary Value
SAFETY IS OUR PRIMARY VALUE Performance Elimination of Fatalities TRCFR1 Fatalities 4.50 4.34 4.11 3.90 CARING CULTURE PLANNING & LEADERSHIP 3.23 SCHEDULING 2 1.80 1.86 1 RISK & CHANGE MONITORING & LEARNING MANAGEMENT ASSURANCE ORGANISATION 0 0 0 0 0 2013 2014 2015 2016 2017 2018 YTD 2019 Focus area
Slide 6: A Transformed Business
A TRANSFORMED BUSINESS Double-sided loading at Kolomela
Slide 7: Operations Overview
OPERATIONS OVERVIEW Sishen Dense Media Separation (DMS) Mining ROM >59%Fe Crushing Buffer Stockpile Beneficiation plant Product ~64-65%Fe ~20Mt 74% lump Sishen JIG plant Mining ROM ~53-56%Fe Crushing Buffer Stockpile Beneficiation plant Product ~63-64%Fe ~11Mt 68% lump Kolomela Direct Shipping Ore (
Slide 8: Operating at Full Potential
OPERATING AT FULL POTENTIAL Enhanced product Improved operational Cost saving portfolio efficiency initiatives Premium (>65% Fe) products P101 benchmark Cumulative target2 40% >100% ~$200m H1 2019: 24% H1 2019: 67% 2019 target: ~$50m 2012: 20% 2012: 30% 2018 achieved: $106m 88
Slide 9: Premium Products Suited to Future Demand
PREMIUM PRODUCTS SUITED TO FUTURE DEMAND Lump: 64 - 65.2% Fe grade Fines: 63.2 - 64.6% Fe grade ~30 Mtpa ~15 Mtpa Lump delivers increased efficiency & helps meet environmental regulation as no sintering needed Average grade 2019F: 64.3% >65% Fe grade premium product is priced off Platts 65% index 99
Slide 10: Transformed Business Focused on Quality
TRANSFORMED BUSINESS FOCUSED ON QUALITY Total sales of premium (>65% Fe) products Mine redesign P101 Portfolio upgrade Low-grade beneficiation Operating Model Disciplined investment 40% 30% 20% 2012 2018 2022F 10 10
Slide 11: Enhanced Product Portfolio
ENHANCED PRODUCT PORTFOLIO Product quality evolution Price premium Lump ratio Fe content $/t over Platts 62 FOB3 +21 6 68.0% 64.0% 64.3% 61.9% 21 6 2012 2019F 2012 2019F 2012 H1 2019 11 11
Slide 12: P101 Efficiency Focus on Mining Activities
P101 EFFICIENCY FOCUS ON MINING ACTIVITIES Mining Processing Drill Blast Load Haul Crush Beneficiate Load-out Focus on key cost drivers to improve operational performance and drive efficiencies ~5% unit cost 12 12
Slide 13: Improving Operational Efficiency
IMPROVING OPERATIONAL EFFICIENCY Adding value through increased Operating model P101 efficiency since 20154 Sishen Operating Equipment Efficiency (%) 78Mt +125% Ore reserves added 100 68 2 years Life of mine 30 2012 H1 2019 2023 Target Targeting >100% benchmark efficiency by 2022 13% Life of mine st
Slide 14: Sustainable Cost Improvement to Offset Mining Inflation
SUSTAINABLE COST IMPROVEMENT TO OFFSET MINING INFLATION Cost & efficiency offsetting haulage distances and geological inflation Cost saving target2 2018-22 ($) Unit cost5 ($/t FOB) $108m Savings2 delivered to date Geological inflation offset by cost savings from 2012 Total ~$200m 37 23 16 38 36 33 3
Slide 15: Established Infrastructure
ESTABLISHED INFRASTRUCTURE Managing logistics Managing supply Final version of photo to be purchased once finalised Key business partner Significant relationship improvement since 2018 No material impact to date Demonstrated performance uplift 15 15
Slide 16: Unlocking Our Potential
UNLOCKING OUR POTENTIAL Kolomela
Slide 17: Leveraging Our Endowment: The Targets
LEVERAGING OUR ENDOWMENT: THE TARGETS Technology and optimisation Efficiency and optimisation Exploration and beneficiation Sishen: UHDMS Kolomela: Phase 1 Northern Cape exploration (ultra high density media separation) Low grade ore beneficiation ~300Mt ~85Mt <40%Fe mineral resource6 mineral resour
Slide 18: Summary
AngloAmerican SUMMARY Real Mining. Real People. Real Difference.
Slide 19: Partnering for Long-Term Success
PARTNERING FOR LONG-TERM SUCCESS Supporting local businesses Inclusive procurement programme 267 localised suppliers $219m 2,670 jobs created Host community suppliers8 16,000 households benefitted $5.1bn Batho Pele mobile health units project Procurement from BEE businesses8 Over 135,000 patients re
Slide 20: Premium Products for Future Demand
PREMIUM PRODUCTS FOR FUTURE DEMAND Assets Capabilities Returns Premium product portfolio Operating Model Strong cash generation Life extension opportunities FutureSmart MiningTM Capital discipline Mutually beneficial Attractive & sustainable Marketing partnerships dividends 20 20
Slide 21: Footnotes
FOOTNOTES 1. Total Recordable Cases Frequency Rate per million hours. 2. Cost savings are net of ~7% mining inflation per annum and structural changes including strip ratios, longer distances and increased lift. 3. Timing effects contributed $6/t. Products are priced in the month of arrival, resulti
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