Anglo American plc · LSE:AAL
Anglo American — Bulks Seminar & Site Visit 2019
29 slides from Anglo American's conference presentation, Nov 12, 2019
Slide 1: Brazil: Minas-Rio and Nickel
BRAZIL: MINAS-RIO AND NICKEL Wilfred Bruijn, CEO Bulks Seminar & Site Visit: Brisbane, 12 November 2019
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: Anglo American in Brazil
ANGLO AMERICAN IN BRAZIL Barro Alto & Codemin Export Minas-Rio pipeline Açu Port Iron Ore: Minas-Rio Nickel: Barro Alto & Codemin 33
Slide 4: Safety is our primary value
SAFETY IS OUR PRIMARY VALUE Performance Elimination of Fatalities Minas-Rio TRCFR1 Fatalities 2.07 2.14 1.57 CARING CULTURE PLANNING & LEADERSHIP 1.3 1.25 SCHEDULING 1.15 1.16 1 0 0 0 0 0 0 2013 2014 2015 2016 2017 2018 YTD 2019 RISK & CHANGE MONITORING & LEARNING MANAGEMENT ASSURANCE ORGANISATION N
Slide 5: Minas-Rio
AngloAmerican MINAS-RIO Real Mining. Real People. Real Difference.
Slide 6: Minas-Rio key messages
MINAS-RIO KEY MESSAGES Operational Strong local Product quality 48 year mine life partnerships excellence 67% Fe with low impurities 3.2bt Ore Reserve2 Collaboration with authorities Strong ramp up and communities 66
Slide 7: Modern integrated business
MODERN INTEGRATED BUSINESS Mining Processing Export Open pit Crushing, screening, milling 529km export pipeline Low LOM strip ratio (0.2)3 Desliming, grinding, flotation JV managed facilities at Açu Port 32 Komatsu haul truck fleet3 38% Fe grade ore upgraded to 67% pellet feed product 77
Slide 8: Minas-Rio operational performance
MINAS-RIO OPERATIONAL PERFORMANCE Production4 (wmt) P101 improvement Fe Content Feed 2019 production guidance +21% 16% ~23 19-21 18-20 Mass Recovery Previous H1 2019 Revised (PIG run) 28% (PIG run) Beneficiation Plant ~30 Production Rate ~23 22-24 24-26 23-25 17 2017 2019F 2020F 2021F 2022F Long-ter
Slide 9: Minas-Rio operational performance
MINAS-RIO OPERATIONAL PERFORMANCE FOB Unit Cost5 ($/tonne) Cost drivers Mining 2019 cost guidance -20% 28-31 24-27 ~24 Processing Original Previous Revised Pipeline & port loading 30 ~24 ~26 ~21 2017 2019F 2020F Long-term potential = c.5% cost base 99
Slide 10: Quality products suited to future demand
QUALITY PRODUCTS SUITED TO FUTURE DEMAND Blast Furnace Pellet Feed Direct Reduction Pellet Feed 66-67% Fe 68% Fe (~65-70% of production6) (~30-35% of production6) Modern steel production focused on quality Bigger blast furnaces and tighter emissions standards 10 10
Slide 11: Best-in-class tailings management
BEST-IN-CLASS TAILINGS MANAGEMENT Best-in-class design Industry leading safety management Group Technical Specialists Downstream Internal risk assurance Starter dam Drainage Independent TRP Engineered construction More robust than tailings-built downstream dam BU Technical Standard expert Engineer o
Slide 12: Alternative deposition technologies: our pathway
ALTERNATIVE DEPOSITION TECHNOLOGIES: OUR PATHWAY Dam deposition Process improvement Dry stacking 12 12
Slide 13: Setting the standard in pipeline management
SETTING THE STANDARD IN PIPELINE MANAGEMENT Fibreoptic monitoring Other pipeline management Technology selected Pressure cycles to estimate fatigue Implementation by March 2020 Water pH control optimisation PIG runs Monitoring & assessment of corrosion Internal scan of pipeline integrity New reagent
Slide 14: P101 driving high performance
P101 DRIVING HIGH PERFORMANCE Ore feed rate Improvement in beneficiation Capacity increase Production increase Ultrafine re-addition into the New reagents process to improve slurry specifications Stable feed Vertmills optimisation Optimised flotation setup Access to higher grade ore Better quality o
Slide 15: Long life, high quality asset
LONG LIFE, HIGH QUALITY ASSET High quality resource Delivering strong returns +0.3 48 year 1.4bt 67% Mine life Saleable product2 Average grade7 Production profile 35 ~30Mtpa 30 25 20 15 ~60% Mining EBITDA margin8 10 5 0 2020 2030 2040 2050 2060 2066 Expansion potential Current LOM 15 15
Slide 16: Nickel
AngloAmerican NICKEL Real Mining. Real People. Real Difference.
Slide 17: Nickel key messages
NICKEL KEY MESSAGES Product quality Operational excellence Markets Premium quality ferronickel Consistently outperform the market World class stability price 17 17
Slide 18: Operations overview
OPERATIONS OVERVIEW Mining Processing Barro Alto Barro Alto 36ktpa average nickel production World class ferronickel producer Large-scale, low-cost and attractive grades 2 lines of rotary kiln and electric furnace Codemin 2 lines of ladle furnace refinery Integrated with Barro Alto 9ktpa average nic
Slide 19: Ferronickel demand
FERRONICKEL DEMAND Nickel Ferronickel is Class 2 Class 1 (LME grade) Class 2 ~95% of supply used in the manufacture of stainless steel Applications include stainless Ferronickel & nickel pig iron Nickel enhances properties of stainless steel: corrosion & speciality steel, resistance, weldability, fo
Slide 20: Electrification & consumer demand support nickel growth
ELECTRIFICATION & CONSUMER DEMAND SUPPORT NICKEL GROWTH Nickel demand (kt) 313 Class 1 (substitutable) 282 92 +11% Class 1 83 (critical) Battery markets diverting Class 1 1,433 Class 2 1,289 nickel 2019 2022F 20 20
Slide 21: Robust performance to continue
ROBUST PERFORMANCE TO CONTINUE Production9 (kt) Operational stability10 Kilns throughput improvement 4% ~50 ~50 Oil consumption improvement 42 42-44 42-44 42-44 16 65% 2011 2018 2019F 2020F 2021F 2022F11 Long-term potential11 Furnace energy consumption improvement Including Class 1 nickel from Plati
Slide 22: Operating model in action
01 11/01/ 2 1.000 2.000 3.000 4.000 5.000 6.000 7.000 0 21/01/ 01 /0 2 6 LCL 8.000 UCL 31 1/ 01 /0 2 6 Mean 10 1/ 01 2 6 20/02/ 01 2 6 01/02/ 01 /0 2 6 11 3/ 01 /0 2 6 21 3/ 01 2 6 31/03/ 01 2 6 10/03/ 01 /0 2 6 20 4/ 01 2 6 30/04/ 01 2 6 2016 10/04/ 01 /0 2 6 20 5/ 01 /0 2 6 30 5/ 01 2 6 09/05/ 01
Slide 23: Optimising costs from a stable base
OPTIMISING COSTS FROM A STABLE BASE C1 unit cost4 (c/lb) Cost drivers Mining Processing 622 ~450 ~450 ~400 2012 2019F 2020F Long-term potential Export Q2 on cost curve Lower nickel production in 2020 P101 benefits from 2022 = c.5% cost base 23 23
Slide 24: Premium quality product
PREMIUM QUALITY PRODUCT Realised price vs ferronickel index % 103.0 102.7 Delivered value to our customers 102.0 102.0 Outperformed market price 2016 2017 2018 YTD 2019 24 24
Slide 25: Innovation driving production growth
INNOVATION DRIVING PRODUCTION GROWTH Bulk ore sorting Briquetting Trial to commence end 2019 Increase in safety by reducing gas build-up Up to 30% grade improvement ~3ktpa increase in nameplate capacity ~5ktpa increase in production ~5% lower plant electricity consumption Production (ktpa) ~50 42-44
Slide 26: A sustainable business
AngloAmerican A SUSTAINABLE BUSINESS Real Mining. Real People. Real Difference.
Slide 27: FutureSmart Mining: Sustainable mining plan
FUTURESMART MININGTM: SUSTAINABLE MINING PLAN Sustainability approach integral to FutureSmart Mining™ Supporting local municipalities: Trusted Corporate Leader projects & fundraising Thriving Communities Crescer: Supporting local value chains Healthy Environment Wind energy project 27 27
Slide 28: Quality products suited to modern markets
QUALITY PRODUCTS SUITED TO MODERN MARKETS Assets Capabilities Returns Products suited to modern Operating Model Steady cash generation demand Successfully ramped up FutureSmart MiningTM Modest capital requirement Established mining jurisdiction Integrated Marketing function Robust margins 28 28
Slide 29: Footnotes
FOOTNOTES 1. Total Recordable Cases Frequency Rate per million hours. 2. Please refer to the AA plc Ore Reserves and Mineral Resources Report 2018 for the tonnes, grades and a breakdown of the classification categories. 3. Average during the next 20 years. 4. Wet basis. Current guidance assumes rece