Anglo American plc · LSE:AAL
Anglo American — Merrill Lynch Global Metals & Mining Conference (May 2009)
24 slides from Anglo American's conference presentation, May 12, 2009
Slide 1: Merrill Lynch Global Metals & Mining Conference
Merrill Lynch Global Metals & Mining Conference Presented by Cynthia Carroll, Chief Executive 12 May 2009
Slide 2: Agenda
Agenda 1 Our Strategic Focus 2 Market Environment 3 Taking Rapid and Decisive Action 4 Pursuing Strategic Growth Options 5 The Investment Case 2
Slide 3: Our Strategic Focus
Our Strategic Focus AMERICAN
Slide 4: Our Strategic Focus
Our Strategic Focus Enhancing our position of owning and operating a world class asset portfolio in the most attractive mining markets • Focusing our portfolio on attractive markets, where we have an advantaged position Building profitable and material positions in copper, seaborne iron ore and expo
Slide 5: Delivering our strategy
Delivering our strategy Portfolio Focus Advantaged Assets Delivering on our focused programme of Majority of our assets are in Q1 and Q2 non-core asset disposals: positions on the cost curve – AngloGold Ashanti ($1.8 bn) Average project life of 40 years, more – China Shenhua Energy ($704 m) than dou
Slide 6: Delivering our strategy
Delivering our strategy Stakeholder Engagement Social Commitment Strengthening relationships with Improved safety record: host governments – Fatalities reduced by 33% Continuing to deliver on BEE in 2008 vs. 2007 – LTIFR improved by 17% in South Africa Secured new order mining rights Embedding Zero
Slide 7: Market Environment
Market Environment AMERICAN
Slide 8: Demand is likely to remain weak in the near term
Demand is likely to remain weak in the near term and timing for recovery remains uncertain Demand for Key Commodities Chinese Steel Inventories kt 2008-2009 Change (%) 0% (2%) -5% (6%) (7%) (8%) Chinese Electricity Consumption (8%) (9%) -10% 35% Bn kWh, monthly y-o-y change (%) Monthly y-o-y change
Slide 9: Key industry themes different from last year
Key industry themes different from last year May 2008 May 2009 Maximising output Managing costs and production Increased infrastructure constraints Efficiency focus at existing infrastructure Increased competition for assets Limited competition for assets Increased project development constraints Re
Slide 10: Anglo has taken necessary actions to be well positioned through the cycle
Anglo has taken necessary actions to be well positioned through the cycle • Long life, cost advantaged assets largely in Q1 and Q2 of cost curve • Strong, well funded organic growth pipeline • Unique portfolio in precious, bulks and base • Strengthened financial position • Internal focus on improvin
Slide 11: Taking Rapid and Decisive Action
Taking Rapid and Decisive Action
Slide 12: Early decisive steps taken
Early decisive steps taken • Conserving cash SIB Capex 130% 2009 capex plans reduced by >50% to $4.5 bn % Depreciation 1,800 including $1.3 bn SIB Capex 1,600 100% $m 1,400 1,200 • Cutting production 1,000 50% 2005 2006 2007 2008 2009e Reduced platinum output (target 2.4 m oz) SIB Capex SIB Capex as
Slide 13: Balance sheet strengthened
Balance sheet strengthened Robust position secured to carry through the downturn, without compromising future growth options • Dividend suspended ($1.6 billion p.a.) • AGA divestment ($1.8 billion) • $2 billion Bond issue – April 2009 • $1.7 billion Convertible Bond issue – April 2009 13
Slide 14: Progressive improvement at Anglo Platinum
Progressive improvement at Anglo Platinum 2008: Initial changes implemented 2009: Next stage of restructuring • Optimising structure of Rustenburg and • Fundamental reshaping of the Amandelbult mines into five mines and platinum business two mines respectively • Major overhaul of the senior • Reduct
Slide 15: Diamonds: Significant action taken
Diamonds: Significant action taken • Took decisive action to eliminate high cost, small scale operations with limited life • Cut production by over 40% for 2009 Debswana - 50-day production holiday and some plants closed DBCM - production holidays and all operations running at reduced production lev
Slide 16: Delivering $2bn Asset Optimisation & Procurement
Delivering $2bn Asset Optimisation & Procurement initiatives progress being made on Asset Optimisation Significant • $1 bn operating profit growth from • Procurement initiatives on track to Asset Optimisation 2009 to 2011 deliver benefits of $1 bn by 2011 • AO embedded throughout • Over $200m delive
Slide 17: Pursuing Strategic Growth Options
Pursuing Strategic Growth Options
Slide 18: Strong project pipeline preserved
Strong project pipeline preserved 2010 / 2011 2012 / 2013 2014 and beyond Minas-Rio Los Bronces Quellaveco Phase I Pebble Sishen Barro Alto South Jacaré Cerrejón Twickenham P40 Sishen Collahuasi Expansion 1 Expan. 2 Sishen Michiquillay Pellets Elders Opencast New Largo Heidelberg Elders U/ground U/g
Slide 19: Major projects well timed to enter production
Major projects well timed to enter production • Los Bronces expansion Net C1 Cash Cost (c/lb) World class Tier 1 copper project 300 250 El Soldado World’s 6th largest copper mine 200 Mantos Blancos Mantoverde Collahuasi 173,000 tpa – first production 150 Los Bronces in 2011 100 50 1st quartile cash
Slide 20: Positioning for growth – Minas Rio
Positioning for growth – Minas Rio Transforming Anglo’s position in iron ore • World class deposit • Major producer of high quality iron ore: 68% Fe content • Resources of 3.9 bn tonnes • Encouraging drilling results: potential to significantly increase resource • Phase 1 production expected to comm
Slide 21: Minas-Rio – a Tier 1 iron ore asset
Positioning for growth – Minas Rio 10% Minas-Rio – a Tier 1 iron ore asset Iron ore quality by region Dotted bubble indicates Australia - high quality processed ore 8% China1 Bubble size indicates an average production of 50 Africa Mtpa Alumina + silica content (%) CIS 6% Australia - medium quality
Slide 22: The Investment Case
The Investment Case ) AMERICAN
Slide 23: Investment of choice
Investment of choice Focused on delivering substantial value throughout the cycle, leveraging our world class asset base and building our $50bn growth pipeline • A unique world-class portfolio of precious, bulks and base metals well positioned at lower end of cost curve in attractive markets • Major
Slide 24: Question and Answer session
ANGLO AMERICAN Question and Answer session
Anglo American — Merrill Lynch Global Metals & Mining Conference (May 2009) on 6ix