Glencore Plc · LSE:GLEN
Glencore — Glencore Xstrata — 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: Zinc
Daniel Maté Chris Eskdale Zinc
Slide 4: Zinc highlights
Zinc highlights A leading integrated zinc producer • Own source production of 1.5Mtpa mined zinc rising towards 1.8Mtpa by 2015 • A leading cost position with under construction projects creating a first quartile cost position by 2015 • Large long-life resource base – average mine lives in excess of
Slide 5: Zinc key asset overview
Zinc key asset overview Industrial assets comprise 24 mines, 7 zinc smelters, 6 lead smelters/refineries with operations and assets in 12 countries and key marketing offices spread across five continents 5
Slide 6: Zinc resource base
Zinc resource base Contained Zinc Resources (Mt) 90 The world’s largest zinc resource base Enlarged resource base provides for a 80 weighted average mine life of 24 years 76.9 (pro-forma 2012 production) based on 70 reserves or 41 years based on measured and indicated resources 60 Additional major b
Slide 7: Zinc priorities
Zinc priorities World class portfolio to be managed, optimised and readied for long term returns Phase 1 - Manage and integrate – DONE • Complete integration of former Xstrata concentrates and metal book into Baar-based marketing system • Industrial assets - single point of key decision making in Ba
Slide 8: Industrial synergies and cost savings of $70M in 2014
Industrial synergies and cost savings of $70M in 2014 Zinc division centrally managed from Baar from day 1. 2014 cost savings and Immediate impacts: synergies: $70M • Know-how centralised under one roof - Industrial and marketing in a single office • On-going integration work across multiple streams
Slide 9: Zinc divisional reporting structure
Zinc divisional reporting structure CEO Ivan Glasenberg Zinc / Lead CFO Steven Kalmin Industrial Marketing Chris Eskdale Daniel Maté Supporting Group Assets Marketing Team Key Field Offices Functions Baar Treasury, Smelter group Mining Group Concentrates Beijing accounting, tax Baar Asset La Paz man
Slide 10: Transformation of zinc asset cost structure
Transformation of zinc asset cost structure $2012 C1 Zinc illustrative cash cost curve (c/lb) Improving our competitive position • Expect to reduce our average C1 costs in next 3 years • Move from current second quartile into the first quartile 2015 forecast 2012 pro-forma mined zinc mined zinc C1:
Slide 11: Forecast zinc mine production growth profile
Forecast zinc mine production growth profile Own source contained zinc (kt) 2,000 1,820 1,786 1,800 1,613 1,600 1,532 1,434 1,400 1,200 1,000 ,800 ,600 ,400 ,200 ,0 2012A 2013F 2014F 2015F 2016F Australia Kazzinc North America Antamina Other Zinc Source: Glencore 11
Slide 12: Major project update
Major project update
Slide 13: Major project update – Bracemac-McLeod (Canada)
Major project update – Bracemac-McLeod (Canada) • 100% owned Mine Entrance • 12th mine in the 50 year-old Matagami Mining Camp • Construction started in mid 2010 and mine production started in May 2013 • 3.7Mt M+I resource, with a potential of an additional 2.5Mt below current ore body • Mine life (
Slide 14: Major project update – McArthur River Mine Phase 3 expansion
Major project update – McArthur River Mine Phase 3 expansion • 100% owned Open Pit Mine • 171Mt M+I resource • Mine life (current production) of 31 years reserves, 46 years M+I resource • Current capacity of 3.5Mtpa producing 240kt zinc contained • Phase 3 expansion approved in mid 2012 • Increase i
Slide 15: Major project update – George Fisher expansion
Major project update – George Fisher expansion • 100% owned Ventilation shaft • 145Mt M+I resource • Mine life of 18 years reserves, 32 years M+I resource • 1Mtpa expansion approved in late 2010 New photo here • Expanded capacity of 4.5Mtpa expected to be achieved in June 2014 • Capital cost of US$2
Slide 16: Major project update – Lady Loretta project
Major project update – Lady Loretta project • 100% owned. Greenfield development Site infrastructure • High grade zinc (with lead and silver) deposit located 135km from Mt Isa • 13Mt M+I resource • Mine life (full production) of 7 years reserves, 8 years M+I resource • Original project announcement
Slide 17: Further growth options
Further growth options • Multiple options within existing project pipeline - no rush to pursue growth for its own sake • Priority is development of low-cost projects with quickest cash payback • Reviewing previously announced Xstrata projects in context of overall growth portfolio • Additional optio
Slide 18: Zinc marketing
Zinc marketing -
Slide 19: Marketing – how we create value
Marketing – how we create value • Glencore is active across the value chain from mines and smelters through to end customers, trading in primary and secondary metals as well as associated by-products • Glencore sources close to 6Mt of zinc/lead concentrates, split into nearly 180 distinct qualities.
Slide 20: Xstrata merger opportunities – leveraging marketing and operating excellence
Xstrata merger opportunities – leveraging marketing and operating excellence Glencore Glencore Leveraging knowledge • Marketing excellence • Technology excellence in lead smelting/refining • Talent Platform • One book • One pool of knowledge • Sharing knowledge and Xstrata experience throughout oper
Slide 21: Xstrata merger opportunities – leveraging marketing and operating excellence
Xstrata merger opportunities – leveraging marketing and operating excellence The former Xstrata way Now Proactive / Dynamic Reactive approach • One global concentrates book • Mine output mainly dedicated to feed • Sales position actively traded own smelters, surplus sold when • Mine output and 3rd p
Slide 22: Market update – short-term zinc outlook
Market update – short-term zinc outlook Macro economic background • Gradual improvement in the key consuming regions should have a positive effect on the main zinc and lead consuming sectors (construction, automotive, etc..) Zinc • Global demand in 2013 up by 5% year on year. Chinese zinc imports up
Slide 23: Market update – medium/long-term zinc outlook
Market update – medium/long-term zinc outlook Zinc mine supply expected to move to Global zinc mine production (kt cont. Zn) deficit soon 19,000 • 5% increase in demand = 600kt+ of new zinc mine capacity needed every year 18,000 • By 2016 nearly 2Mt of new annual production required, by 2020 - 5Mt 1
Slide 24: Conclusion
Conclusion • Glencore is now the world’s leading integrated zinc and lead producer with a unique business model combining mining, metal production, logistics and marketing supported with a global network of offices to provide superior service to our international customer base • Glencore now holds t
Slide 25: Q&A
Q&A