Glencore Plc · LSE:GLEN
Glencore — Investor Day (December 2014)
51 slides from Glencore's investor day presentation, Dec 10, 2014
Slide 1: Investor Day
Ernest Henry copper concentrator, Australia Investor Day 10 December 2014 08:00 - Welcome and Overview | Ivan Glasenberg 08:20 - Finance Update | Steven Kalmin 08:45 - Copper Copper||Telis TelisMistakidis Mistakidis 09:15 - Coal | Tor Peterson & Peter Freyberg 09:45 - Break 10:05 - Zinc | Daniel Mat
Slide 2: Forward looking statements
Forward looking statements This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as "plans", "expects
Slide 3: Copper
Alumbrera copper concentrator, Argentina Copper Telis Mistakidis
Slide 4: Topics
Topics 1. Glencore Copper Department • Overview • Description 2. Katanga Mining • Production issues • Power 3. Antapaccay • Tintaya concentrator restart • Antapaccay mini expansion 4. Copper Market – where is the surplus? 4
Slide 5: Glencore copper in context
Glencore copper in context • Third largest global mined copper producer and the world’s largest copper supplier • Integrated assets (mines, smelters and refineries) and marketing 2013 copper production (kt) 3,000 2,500 2,000 1,500 1,000 500 0 Competitor 1 Competitor 2 Glencore Competitor 3 Competito
Slide 6: Glencore copper assets
Glencore copper assets Mined Cu Smelter/Refinery N America 90k MT Horne/CCR 300k MT Asia 60k MT Kazzinc 70k MT S America 660k MT Africa 500k MT Australia 260k MT Altonorte 300k MT Mopani 200k MT Isa/Pasar 600k MT 6
Slide 7: Capability across the copper raw materials chain
Capability across the copper raw materials chain • Integrated industrial assets and marketing • One million MT custom smelting and refining • Capability to process complex concentrates with precious metals and deleterious elements. Cobar Mt Isa Antapaccay Nkana Katanga EHM Antamina Mufulira Mutanda
Slide 8: Mined production growth
Mined production growth Own source mined copper production (kt) Merger 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F Total copper Former Xstrata Note: does not include copper from Kidd, Kazzinc and Ni operations 8
Slide 9: Mined production growth by region
Mined production growth by region Own source mined copper production (kt) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2012A 2013A 2014F 2015F 2016F 2017F African Copper Collahuasi Antamina Other South America Australia By-product Source: Glencore 9
Slide 10: Katanga 2014 production issues
Katanga 2014 production issues 220 210 16 210 200 16 Cu Cathode (‘000) 190 180 2 8 170 2 165F 160 150 140 130 120 Cu prodution Power direct Power (indirect) Electrical Projects delays Reduced Cu production budget & Mechanical sulphide / ASCu actual 10
Slide 11: Standby generators deployment
Standby generators deployment Generating Capacity UNITS MW KTC 4 2 2 2 KTO 1 2 1 1 1 1 Luilu 1 2 KOV (Convert to Co-Gen) 4 7 Sub – Total 17 Co-Gen 1 (New at Luilu:leach,CCDs) Now Generator farm (6.6 and 15kV) 6 10 Sub - Total 27 Co-Gen 2 (New at Luilu:EW2/3) April Generator farm (33kV) 6 10 Total 37
Slide 12: Global Power Project – update
Global Power Project – update Description • 450MW for Kamoto Copper Company and partners • 350MW of new power and 1000MW transmission from INGA to Kolwezi • Project cost – $368M, Lots 1 to 14 • Reimbursed via 40% credit to power bills • Additional 10% withheld for maintenance fund • 75MW available t
Slide 13: Global Power Project – timeline
Global Power Project – timeline 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Lot 3 Unit 3 - Nzilo Quick Fix Lot 4 Unit G27 Inga refurbishment Lot 5 Unit G28 Inga refurbishment Lot 6 Convertor transformer DC Link Pole 1 Lot 7 Convertor transformer DC Link Pole 2 Lot
Slide 14: Katanga ramp-up drives future production growth
Katanga ramp-up drives future production growth Copper cathode production (kt); Capex $M 350 3,500 300 3,000 250 2,500 200 2,000 Cu k Tonnes 150 1,500 100 1,000 50 500 165 242 274 286 301 42 52 58 61 87 22 0 0 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F Cu Cathode Production CAPEX So
Slide 15: Katanga ramp-up drives future production growth
Katanga ramp-up drives future production growth Copper cathode production (kt); Capex $M 350 3,500 300 3,000 250 2,500 200 2,000 Cu k Tonnes 150 1,500 100 1,000 50 500 165 242 274 286 301 42 52 58 61 87 22 0 0 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F Cu Cathode Production CAPEX So
Slide 16: New CM5 SAG Mill installed and commissioned
New CM5 SAG Mill installed and commissioned 16
Slide 17: New oxide floatation cells installed and commissioned
New oxide floatation cells installed and commissioned 17
Slide 18: New concentrate roaster commissioned
New concentrate roaster commissioned 18
Slide 19: Solvent Extraction commissioned
Solvent Extraction commissioned 19
Slide 20: 200ktpa EW2 in production
200ktpa EW2 in production 20
Slide 21: First cathodes harvested from 80ktpa EW3 expansion
First cathodes harvested from 80ktpa EW3 expansion 21
Slide 22: Antapaccay – Tintaya Concentrator Restart
Antapaccay – Tintaya Concentrator Restart Tintaya restart • Existing Tintaya concentrator to process 20 ktpd of ore from Antapaccay mine • Startup in May 2015 • 34kt per year Cu in concs for LOM avg. 43kt per year Cu in concs for the first 5 years • Capex of $64M: • Mining: $25M • Concentrator: $27M
Slide 23: Antapaccay – Incremental Plant Expansion
Antapaccay – Incremental Plant Expansion Expansion of Antapaccay plant: • Process 82 ktpd of ore from Antapaccay mine using existing infrastructure in 2016 • capacity incrementally increased; 70 ktpd (design) to 77 ktpd (current) and now 82 ktpd • total Cu in concs >200ktpa (inc Tintaya) • 9kt per y
Slide 24: Tier 1 asset portfolio and cost structure
Tier 1 asset portfolio and cost structure Illustrative Copper C1 cash cost curve Q1 First quartile cost position achieved for 2013A asset portfolio in 2014 $1.65/lb 2016F $1.36/lb c.$300M industrial merger synergies and other cost savings by end 2014 Unit mine costs drop through brownfield expansion
Slide 25: Copper market
Altonorte anodes, Antofagasta Port, Chile Copper market
Slide 26: Global Exchange stocks are at lowest levels since 2008
1,000,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Jul-08 Sep-08 Nov-08 Source: Bloomberg, Reuters Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 LME Jan-11 Mar-11 May-11 SHFE Jul-11 Sep-11 Nov-11 COMEX Jan-12 Mar-12 May-12 Jul-12
Slide 27: Global copper warehouse stocks are reducing further
Global copper warehouse stocks are reducing further Global warehouse copper stocks (kt Cu) 1,800 1,600 1,400 1,200 722k 1,000 245k 800 600 400 200 0 Jan 2013 Jun 2013 Jan 2014 Jun 2014 Dec 2014 LME COMEX SHFE CHINA BONDED Source: Bloomberg, Reuters, Glencore estimates 27
Slide 28: Chinese Copper scrap imports are falling
Chinese Copper scrap imports are falling Chinese copper scrap net imports (kt contained Cu) 3,000 2,500 2,000 13% yoy 19% yoy 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: China customs data 28
Slide 29: Chinese imports and apparent consumption
Chinese imports and apparent consumption 2013 vs 2013 Jan-2014 Jan- 2011 2012 2013 YoY Chg 2014E YoY Chg 2012 Oct Oct Copper Cathode Imports 2'825 3'396 3'198 (5.8%) 2'557 2'948 15.3% 3'538 10.6% Exports 156 274 293 7.1% 246 220 (10.7%) 264 (10.0%) Net Imports 2'669 3'122 2'905 (7.0%) 2'311 2'728 18
Slide 30: Demand vs Supply per ICSG and Wood Mackenzie
Demand vs Supply per ICSG and Wood Mackenzie Copper Demand/Supply balance estimates 2014 2015 ICSG Apr ‘14 Estimate ~400 kt ~600 kt Surplus surplus surplus now 90k MT? ICSG Oct ‘14 Estimate ~300 kt ~390 kt deficit surplus Minus: Kennecott 100k (Δ 700 kt lower) (Δ 210 kt lower) Escondida 150k Alumbre
Slide 31: Latest 2015 supply forecasts may still be very optimistic
Latest 2015 supply forecasts may still be very optimistic +200kt? • DRC running at 950kt in 2014. To go to just over 1 mt in 2015 +320kt? • Production double counted Frontier at Mopani. 2014 production is 720 kt; • Production and commissioning issues. 2015 to be 850 kt +350kt? • Indonesian concentra
Slide 32: 2015 copper supply forecast keeps changing
2015 copper supply forecast keeps changing • Brookhunt and ICSG give 390 kt surplus guidance • Taking the previous slide, deduct 1.8 Mt = Deficit of 1.4 - 1.6 Mt for 2015? • Consumption - the world is emerging from the biggest recession in 100 years 25,000 2015 supply forecast as estimated in each p
Slide 33: Thank you
Thank you 33
Slide 34: Appendix: Copper asset update
Kantanga Phase V, EW3 under commissioning, DRC Appendix: Copper asset update
Slide 35: Katanga expansion nearing completion
Katanga expansion nearing completion
Slide 36: New KOV pit crusher completed
New KOV pit crusher completed 36
Slide 37: Installation of new concentrate stockpile shed
Installation of new concentrate stockpile shed 37
Slide 38: Heap leach extension complete
Heap leach extension complete 38
Slide 39: DRC power project
Refurbishment of Inga Unit G27, DRC DRC power project 39
Slide 40: Mopani – synclinorium and deeps project update
New acid plant, Mufilira smelter, Zambia Mopani – synclinorium and deeps project update
Slide 41: Synclinorium – Project Site
Synclinorium – Project Site 41
Slide 42: Synclinorium – New Winder Main Shaft
Synclinorium – New Winder Main Shaft 42
Slide 43: Synclinorium – New Winder
Synclinorium – New Winder 43
Slide 44: Synclinorium – New Winder House
Synclinorium – New Winder House 44
Slide 45: Synclinorium – Sub Station
Synclinorium – Sub Station 45
Slide 46: Synclinorium – New Generator Building
Synclinorium – New Generator Building 46
Slide 47: Synclinorium – Loading Station – 1231m level
Synclinorium – Loading Station – 1231m level 47
Slide 48: Synclinorium – Loading Station – 1231m Level
Synclinorium – Loading Station – 1231m Level 48
Slide 49: Synclinorium – Ventilation Shaft
Synclinorium – Ventilation Shaft 49
Slide 50: Mufulira Deeps – Raise Bore – 500m Lift
Mufulira Deeps – Raise Bore – 500m Lift 50
Slide 51: Mindola Deeps – 4960L
Mindola Deeps – 4960L 51