Glencore Plc · LSE:GLEN
Glencore — Investor Day (September 2013)
25 slides from Glencore's investor day presentation, Sep 10, 2013
Slide 1: Investor Day
Investor Day 10 September 2013 08:15 - Welcome and Overview | Ivan Glasenberg 09:00 - Finance Update | Steven Kalmin 09:30 - Coal | Tor Peterson & Peter Freyberg 10:15 - Break 10:35 - Agricultural Products | Chris Mahoney 11:05 - Oil | Alex Beard 11:45 - Zinc | Daniel Maté & Chris Eskdale 13:45 - Co
Slide 2: Forward looking statements
This presentation has been prepared by Glencore Xstrata plc ("Glencore"). Forward looking statements This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. Such statements are qualified in their entirety by the inherent risks
Slide 3: Coal
Tor Peterson Peter Freyberg Coal
Slide 4: Coal highlights
Coal highlights Leading thermal coal producer • Own production of 121Mt in 2012 rising towards 140Mt by 2015 • Extensive portfolio of multi-region/quality coals • Strong existing FOB cash margin business with further improvements as new low cost production in South Africa and Australia is commission
Slide 5: Coal key asset overview
Coal key asset overview Industrial assets comprise 33 mines totaling 180 million tonnes capacity, with operations and assets in 3 countries and key marketing offices spread across 19 countries 5
Slide 6: Industrial synergies and cost savings of $576M in 2014
Industrial synergies and cost savings of $576M in 2014 Adjusting for the current market reality 2014 cost savings and • A significant percentage of thermal coal production is now loss making synergies: $576M • Move from growth emphasis to margin focused • Restructuring of corporate and divisional ov
Slide 7: Coal divisional reporting structure
Coal divisional reporting structure CEO Ivan Glasenberg Coal CFO Steven Kalmin Industrial Marketing Peter Freyberg Tor Peterson Supporting Head of Finance Assets Functions Merger and Key Offices Key Offices Group Functions Earl Melamed Acquisitions Atlantic Pacific Accounting Australia Logistics Swi
Slide 8: Operational restructuring: improved labour productivity
Operational restructuring: improved labour productivity Australian operations (FTE headcount) • Significant productivity improvements 13,000 21% increase in 10 in Australian and Colombian 2012 74.4Mt 2013E 80.2Mt productivity Kt/FTE businesses 8 11,000 • Overall reduction in head count Kt/FTE 6 • Ac
Slide 9: Operational restructuring: safe and efficient operations
Operational restructuring: safe and efficient operations Tier 1 Units performance trend Safety performance 2005 to 2013 YTD 2010 - 2013 • Utilisation up 18% 18 900 • Productivity up 15% 16 800 Large Owner operator fleet • 81 Large Shovels/Excavators 14 TRIFR LTIFR 700 • 505 Haul Trucks DISR • Includ
Slide 10: Thermal projects in execution will improve our cash margins
Thermal projects in execution will improve our cash margins FOB thermal coal cash margin at current market prices ($/t) 40 Glencore 30 Major 1 Major 2 Major 4 20 Major 3 Indo 1 Indo 2 10 Other - (10) Million tonnes (20) 0 90 180 270 360 450 540 630 720 810 900 990 1080 1170 Source: Glencore 10
Slide 11: Coal Resource base
Coal Resource base Resource (Mt) Marketable Reserves (Mt) 40,000 4,500 35,000 4,000 3,500 30,000 3,000 25,000 2,500 20,000 2,000 15,000 1,500 10,000 1,000 5,000 500 0 0 Glencore 2011 Glencore 2012 Glencore 2011 Glencore 2012 pro-forma pro-forma Colombia South Africa Australia Canada Colombia South A
Slide 12: Coal production mix offers geographical diversification
Coal production mix offers geographical diversification Consolidated coal production (Mt) Base includes projects in execution, namely Ravensworth North, Ulan West, Rolleston expansion, Tweefontein life extension 180.0 160 160.0 146 153 132 138 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2012A 2013F 20
Slide 13: Major project update
Major project update aN
Slide 14: Coal project commissioning dates
Coal project commissioning dates Ulan West 8Mtpa brownfield capacity Cerrejón Australia Puerto Nuevo 7Mtpa brownfield 21Mtpa port capacity capacity Colombia Colombia 2012 2013 2014 2015 2016 +2016 SA Projects Argent, Ravensworth North Tweefontein Optimum/Zonnebloem 8Mtpa brownfield capacity 8Mtpa br
Slide 15: Major project update – Puerto Nuevo
Major project update – Puerto Nuevo Asset Details Shiploader • 100% Glencore • New direct ship loading facility • 21Mtpa capacity • Barge loading has ceased Project details • US$550M capex program, operating but in final stages of commissioning • Ship loading commenced first half 2013 • Loading capa
Slide 16: Major project update – Ravensworth North
Major project update – Ravensworth North Asset Details Mine development • 90% Glencore / 10% Itochu • Brownfield project • 8Mtpa, export thermal and semi-soft coking • 23 year mine life • Second quartile cash cost Project details • 86% complete • Approved 2011 CHPP and product stockpiles • Completio
Slide 17: Major project update – Ulan West
Major project update – Ulan West Asset Details Box cut and main gate entry • 90% Glencore / 10% Mitsubishi • 8Mtpa export thermal coal • 14 year mine life • First quartile cash cost at full production Project details • 58% complete • Approved 2010 • Longwall commences mid 2014 Longwall and FCT on si
Slide 18: Major project update – Tweefontein
Major project update – Tweefontein Asset Details CPP under construction • 70% Glencore / 30% ARM • 4.8Mtpa export / 1.8Mtpa Eskom • Project completion 2015; 24 year mine life • First quartile cash cost at full production Project details • 46% complete • Brownfield mine expansion, new Rail loop const
Slide 19: Major project update – Cerrejón P40
Major project update – Cerrejón P40 Asset Details Marine Works • 33% Glencore / 33% Anglo / 33% BHPB • Expansion from 34Mtpa to 41Mtpa • +20 year mine life • By-pass export thermal coal • First quartile cash cost Project details Fleet expansion • 73% complete • Mine expansion, upgraded rail & second
Slide 20: Projects: Portfolio Rationalisation
Projects: Portfolio Rationalisation • Focus on higher returning, brownfield, life of Pipeline optionality Stage Country Study Phase Completion mine continuation projects • Bring studies to completion for next tier of Argent PF SA high return, low infrastructure requirement Togara North PF Aus projec
Slide 21: Coal marketing
Coal marketing
Slide 22: Marketing – how we create value
Marketing – how we create value Arbitrage Geographical • Multi-origin optionality across sales contracts allows for maximising returns depending on market dynamics Quality • Size of Trading and Production Book allows for most efficient allocation of products according to customers requirements and b
Slide 23: Market update – Thermal coal supply and demand
Market update – Thermal coal supply and demand Seaborne thermal coal supply (Mt) Seaborne thermal coal demand (Mt) 1,047 995 1,007 979 1,000 970 1,000 946 917 935 880 880 796 796 800 800 600 600 400 400 200 200 0 0 2011 2012 2013F 2014F 2015F 2016F 2011 2012 2013F 2014F 2015F 2016F Indonesia Austral
Slide 24: Conclusion
Conclusion • The merger creates the world’s leading seaborne thermal coal business, combining a multi-region, multi-quality production base of more than 120 million tonnes with the un-matched marketing capability of Glencore’s global support infrastructure • Utilising a sharp focus on cash margin, o
Slide 25: Q&A
Q&A