Anglo American Plc · LSE:AAL
Anglo American — Anglo American Platinum — Technical Presentation (November 2016)
31 slides from Anglo American's technical presentation, Nov 24, 2016
Slide 1: Platinum: Overview of PGM Markets
PLATINUM OVERVIEW OF PGM MARKETS 24 NOVEMBER 2016 David Jollie, Market Analysis Manager Miss South Africa Platinum Crown 2013 - 2015
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation has been prepared by Anglo American Platinum Such forward‐looking statements are based on numerous any forward‐looking statement contained herein to reflect any Limited (“Anglo American Platinum”) and comprises the written assumptions regarding Anglo American’s
Slide 3: Overview
OVERVIEW 1 Primary supply 2 Secondary supply 3 Current demand 4 The automotive sector – opportunity or challenge 5 Platinum jewellery 6 Demand stimulation 7 A few thoughts on pricing 8 Questions 3
Slide 4: Where do the platinum group metals come from?
1 Primary supply WHERE DO THE PLATINUM GROUP METALS COME FROM? Mogalakwena mine Auto catalyst recycling Jewellery recycling Norilsk 4
Slide 5: Global platinum group metal supply
1 Primary supply GLOBAL PLATINUM GROUP METAL SUPPLY A declining supply picture emerges at the end of the decade Global platinum supply 2015-2025 (000 oz) 9,000 CAGR 2015 – 2025: 0.1% 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Recycling Ot
Slide 6: The primary cash cost curve
1 Primary supply THE PRIMARY CASH COST CURVE 2016 cash costs Spot price, 16 Nov Source: SNL 6
Slide 7: What will happen to primary supply?
1 Primary supply WHAT WILL HAPPEN TO PRIMARY SUPPLY? South African production and capex Refined platinum production versus capital expenditure (2015 money terms) Source: Venmyn Deloitte 7
Slide 8: What could supply look like?
1 Primary supply WHAT COULD SUPPLY LOOK LIKE? Bring on new supply is challenging Source: Johnson 8 Matthey
Slide 9: Modest growth in recycling of platinum forecast
2 Secondary supplyy MODEST GROWTH IN RECYCLING OF PLATINUM FORECAST 9 Source: Anglo American Platinum
Slide 10: Why do people buy the platinum group metals?
3 Current demand WHY DO PEOPLE BUY THE PLATINUM GROUP METALS? 10 Images: Platinum guild international; Johnson Matthey
Slide 11: Global platinum demand by sector
3 Current demand GLOBAL PLATINUM DEMAND BY SECTOR Global platinum demand 2015-2025 (000 oz) CAGR 2015 – 2025: 1.0% 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: SFA (Oxford) Other Jewellery Automotive 11
Slide 12: Global palladium demand by sector
3 Current demand GLOBAL PALLADIUM DEMAND BY SECTOR Global palladium demand 2015-2025 (000 oz) CAGR 2015 – 2025: 1.1% 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: SFA (Oxford) Other Automotive 12
Slide 13: The automotive sector
4 The automotive sector – opportunity or challenge THE AUTOMOTIVE SECTOR Annual light duty vehicle production CAGR 2015 – 2025: 2.9% 120,000,000 110,000,000 100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2013 2014 2015 2016 2017 2018
Slide 14: What is the future for the diesel engine?
4 The automotive sector – opportunity or challenge WHAT IS THE FUTURE FOR THE DIESEL ENGINE? Source: LMC Automotive 14
Slide 15: Thrifting and substitution
4 The automotive sector – opportunity or challenge THRIFTING AND SUBSTITUTION Limited risk, and some opportunity as emission standards tighten % of maximum emissions Euro 5/Euro 6 HC Hydrocarbon CO: Carbon monoxide 15 NOX: Oxides of nitrogen Source: Platinum Metals Review/Johnson Matthey
Slide 16: Developments in the automotive industry
4 The automotive sector – opportunity or challenge DEVELOPMENTS IN THE AUTOMOTIVE INDUSTRY A degree of scepticism should be applied regarding future technologies… 16
Slide 17: The future for hybrids
4 The automotive sector – opportunity or challenge THE FUTURE FOR HYBRIDS Hybrids and Oil Prices in the USA 4.0 140 3.5 120 3.0 100 2.5 80 2.0 60 1.5 Forecast EV Penetration Rates 1.0 40 12% Hybrid US Mkt Share (%, LHS) FHEV MHEV PHEV BEV EREV FCEV 0.5 20 WTI ($/barrel, RHS) 10% 0.0 0 Dec 08 May 09
Slide 18: Electric cars – myth and reality
4 The automotive sector – opportunity or challenge ELECTRIC CARS – MYTH AND REALITY 18 Images: Tesla (top left); David Jollie (top right); Nissan (bottom)
Slide 19: ICE cars more expensive but XEV premiums will decline
4 The automotive sector – opportunity or challenge INTERNAL COMBUSTION ENGINE CARS WILL BECOME MORE EXPENSIVE BUT XEV PREMIUMS WILL DECLINE HEV: Hybrid Electric Vehicle PHEV: Plug-in Hybrid Electric Vehicle Source: Autonomie BEV: Battery Electric Vehicle FCEV: Fuel Cell Electric Vehicle 19
Slide 20: Potential for jewellery demand - China
5 Platinum jewellery POTENTIAL FOR JEWELLERY DEMAND - CHINA Source: Johnson Matthey 20
Slide 21: Jewellery demand - retailers
5 Platinum jewellery JEWELLERY DEMAND - RETAILERS Number of Chow Tai Fook points-of-sale in greater China 2,500 2,000 1,500 1,000 500 0 2012 2013 2014 2015 2015H2 Source: Chow Tai Fook 21
Slide 22: Uncertainty in jewellery demand: economic growth – China
5 Platinum jewellery UNCERTAINTY IN JEWELLERY DEMAND: ECONOMIC GROWTH – CHINA Growth in GDP components (bn USD) 700 600 Consumption Investment 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: IMF, World Bank, Glaux Meta
Slide 23: Uncertainty in jewellery demand: demographics
5 Platinum jewellery UNCERTAINTY IN JEWELLERY DEMAND: DEMOGRAPHICS Source: Chinese Bureau of Statistics 23
Slide 24: Stimulating demand – our strategy
6 Demand stimulation STIMULATING DEMAND – OUR STRATEGY 1 Investment demand Grow investment demand via the World Platinum Investment Council (WPIC) which will promote Pt as Near Term an investment product 2 Jewellery demand Three key focus Grow sustainable jewellery demand and reduce areas for furthe
Slide 25: Demand stimulation – investment
6 Demand stimulation DEMAND STIMULATION – INVESTMENT 25 Source: Johnson Matthey, Austrian Mint, Anglo American Platinum
Slide 26: Stimulating Indian jewellery demand
6 Demand stimulation STIMULATING INDIAN JEWELLERY DEMAND From arranged marriages to true love 26
Slide 27: Overview of existing market development activities
6 Demand stimulation OVERVIEW OF EXISTING MARKET DEVELOPMENT ACTIVITIES Leveraged / co-funded Direct into Indirect investment and/or Investment universities/ Direct investment Equity investment advocacy programmes, leveraging model research facilities partners with similar interests FC Cofimvaba FC
Slide 28: Stimulating demand - new applications
6 Demand stimulation STIMULATING DEMAND - NEW APPLICATIONS Number of patents referencing each metal 3,000 2,500 2,000 Pt 1,500 Pd Rh 1,000 500 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Espacenet, Anglo American Platinum 28
Slide 29: Stimulating demand - new applications for platinum
6 Demand stimulation STIMULATING DEMAND - NEW APPLICATIONS FOR PLATINUM Source: Espacenet, Anglo American Platinum 29
Slide 30: Price performance in 2016
7 A few thoughts on pricing PRICE PERFORMANCE IN 2016 Source: Bloomberg 30
Slide 31: Slide 31
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