Anglo American plc · LSE:AAL
Anglo American — Merrill Lynch Global Metals & Mining Conference 2010
28 slides from Anglo American's conference presentation, May 11, 2010
Slide 1: Merrill Lynch Global Metals & Mining Conference
Merrill Lynch Global Metals & Mining Conference Cynthia Carroll Anglo American Plc Chief Executive 11 May 2010
Slide 2: Agenda
Agenda 1. • A unique and diversified portfolio 2. • A transformed business model 3. • Volume growth - leading the way 4. • Our outlook 2
Slide 3: A unique & well diversified portfolio
A unique & well diversified portfolio Anglo American has a well balanced portfolio across precious, bulks & base Anglo American core businesses 2009 revenue1 (US$b) 2009 Net Assets2 % Precious 33% Bulks Bulks 44% Precious Diamonds 44% Diamonds Iron Ore & 38% 4% 1.7 Manganese Iron Ore & 3.4 Manganese
Slide 4: …with advantaged positions (cost curves)
…with advantaged positions Favourable cost curve positioning with the majority of production in the lower half of the cost curves Export Thermal Coal1 Copper2 s je Co once si Indicative Zib einkop ua FOB US$/t p ed de oo position post u llah r sB Landa Go ensi eh Los Bronces ulo Kl Lo e expansion Gr
Slide 5: Stable returns - even in turbulent times..
Stable returns - even in turbulent times.. Outperforming the mining industry Historic Group net margin Op. profit Net Margin % Anglo operating profit US$b Anglo net margin 12 Industry net margin 30% 23% 24% 23% 10 25% 8 18% 20% 15% 15% 6 15% 10.1 10.1 9.8 4 6.4 10% 5.0 4.7 2 5% 0 0% 2004 2005 2006 2
Slide 6: Agenda
Agenda 1. • A unique and diversified portfolio 2. • A transformed business model 3. • Volume growth - leading the way 4. • Our outlook 6
Slide 7: Major restructuring completed during a period of economic crisis
Major restructuring completed during a period of economic crisis Major Group reorganisation complete • Significant restructuring achieved at Anglo Platinum and De Beers • Major productivity gains across the Group • Headcount reduction of 23,400 • Asset optimisation and procurement delivering ahead o
Slide 8: Management now closer to the operations
Management now closer to the operations New operating structure Divisional Headquarters • 7 focused business units • Copper, Nickel & Iron Ore Brazil in South America HQ & • Thermal Coal, Kumba & Platinum in South Other Africa Mining & Industrial • Met Coal in Australia • Management layer removed Ir
Slide 9: A step change in safety performance
A step change in safety performance A good safety record indicative of strong operating performance Fatalities • In Q1 2010 fatalities were 67% lower than Q1 2009 • 92% of our sites operated without fatalities in 2009 44 55% 40 improvement 28 • Anglo Platinum has seen a 42% reduction in 28 fatalitie
Slide 10: A strengthening balance sheet
A strengthening balance sheet Significant increase in cash flows from 2012 • Significant increase in cash flows from 2012 driven by; ¾ Key projects coming into production ¾ Non core asset sales • Capex to peak at c. $6bn in 2010 2010: Proceeds from asset sales commence 2011: Key projects enter produ
Slide 11: Cost management culture embedded in the Group
Cost management culture embedded in the Group Significant cost reductions of US$712m (5%) across the Group in FY09 • Major productivity gains across the Group • Asset Optimisation & Procurement delivering ahead of schedule Asset optimisation Procurement Operating profit Cost savings improvement (ope
Slide 12: Platinum: a business undergoing transformation, now delivering results
Platinum: a business undergoing transformation, now delivering results Improved productivity and significant head count reductions Improved productivity Headcount reductions • Continued progress in safety m2 per Number of • 2009 platinum production target of employee 2010 employees target 2.4 m oz a
Slide 13: Platinum: A drive to outperform
Platinum: A drive to outperform Near term significant shift of production to the lower half of cost curve Price US$/oz Driving down the cost curve by: 50% 100% • Optimising infrastructure Platinum price • Maximising low cost ounces • Continuing productivity improvements • Implementing flexible produ
Slide 14: Diamonds: Decisive action taken
Diamonds: Decisive action taken Major turnaround: Embedded lower cost base throughout the business De Beers global headcount • Decisive action in exceptionally challenging trading environment Number of • Costs tackled aggressively, $1.1bn reduction in employees operating and capital expenditure in 2
Slide 15: Agenda
Agenda 1. • A unique and diversified portfolio 2. • A transformed business model 3. • Volume growth - leading the way 4. • Our outlook 15
Slide 16: Growth strategy
Growth strategy Focus on growth in most attractive commodities Targeted commodities: • Structurally most attractive; • Historically highest returns; • Businesses where Anglo American has outperformed the competition through the cycle; • Businesses where Anglo has assets that are advantaged due to co
Slide 17: Volume growth: A key differentiator
Volume growth: A key differentiator Projects will increase production by over 33% by 2013 Existing Approved Projects in Production + Projects + conceptual 200 stage 180 +90% Indexed production growth (2009 = 100) 160 140 120 +33% 100 Nickel 80 Copper 60 PGM 40 Met Coal 20 Thermal Coal Iron Ore 0 200
Slide 18: Copper: One of the strongest pipelines in the industry
Copper: One of the strongest pipelines in the industry Copper production set to double to 1.2 mtpa Production outlook Attributable Production (kt contained Cu) • Organic copper pipeline could see 1,400 production double to 1.2 mtpa 1,200 Michiquillay • Significant additional copper projects Mantos B
Slide 19: Key Copper projects
Key Copper projects Los Bronces – Start up 2011 Copper brownfield expansion in Chile • Project 27% complete with start up on track for Q4 2011 • Capex $2.3bn - $2.5bn, spend to date $1.0bn • Positioned in the lower half of the cost curve Picture • Will become 5th largest copper mine in the world • E
Slide 20: Met Coal: Targeted growth will drive higher profitability and returns
Met Coal: Targeted growth will drive higher profitability and returns Metallurgical Coal production Production outlook mpta 55 • Grosvenor: significant growth project 50 Bowtie set for board approval in 2010. Will Dartbrook produce 4.3 mtpa of met coal, with 45 Drayton Sth Moranbah Sth potential to
Slide 21: Significant metallurgical coal volume growth
Significant metallurgical coal volume growth Grosvenor set for approval 2010 Metallurgical Coal Project, Queensland, Australia • Capex c. US$975m • Expected to enter feasibility study phase 2010 • Early works construction in 2011 • First production 2013 from single longwall • Production expected to
Slide 22: Nickel: Approved production to triple by 2012
Nickel: Approved production to triple by 2012 Nickel production Production outlook • Strategic projects in the pipeline mean ktpa 200 Anglo will become a major player in the 180 Nickel industry 160 Morro Sem Boné 140 • Implementation of Barro Alto, Morro 120 Sem Boné and Jacaré (phase 1) will 100 Ja
Slide 23: Key nickel project coming on stream in 2011
Key nickel project coming on stream in 2011 Barro Alto set to drive down overall nickel cost position Nickel Project in Brazil • Project well advanced with start up on track for Q1 2011 • Capex $1.8bn - $1.9bn, spend to date $1.2bn • Positioned in the lower half of the cost curve • Average operating
Slide 24: Further Nickel growth options under consideration
Further Nickel growth options under consideration Morro Sem Boné Nickel Project, Brazil • Competitive asset, expected to operate in lower half of the cost curve • Pre-feasibility study expected 2010 • Production expected be approximately 30 ktpa Jacaré Nickel Project, Brazil • Competitive asset, exp
Slide 25: Iron Ore: Major projects under construction
Iron Ore: Major projects under construction Minas Rio Iron Ore Project in Brazil • First production in 2012 with full ramp-up to 26.5 Mtpa in 2013 • Revised attributable capex of $3.8bn announced due to scope changes at the pipeline, port, mine & the stronger Brazilian Real • First part of the insta
Slide 26: Agenda
Agenda 1. • A unique and diversified portfolio 2. • A transformed business model 3. • Volume growth leading the way 4. • Our outlook 26
Slide 27: Medium & long term outlook remains strong
Medium & long term outlook remains strong Demand for key metals remains robust, driven by developing economies Emerging economies remain key with China and EM countries will contribute advanced economies showing slower significantly to global GDP growth GDP growth in the near term Real GDP growth %
Slide 28: In summary
In summary A clear strategy in place to deliver shareholder value • A unique and well diversified portfolio • A transformed operating model • Volume growth leading the way • Medium term outlook remains strong 28
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