African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — 2nd Annual DB Access Asia Conference 2011
38 slides from African Rainbow Minerals's conference presentation, May 2011
Slide 1: Aggressive growth continues in a diversified portfolio of commodities
Aggressive growth continues in a diversified portfolio of commodities 2nd Annual DB Access Asia Conference 2011 Stompie Shiels: ARM Executive Director, Business Development 1 We do it better
Slide 2: Disclaimer
Disclaimer Certain statements in this report constitute forward looking statements that are neither reported financial results nor other historical information. They include but are not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, pla
Slide 3: ARM's growth projects are delivering into improved commodity markets
“ARM’s growth projects are delivering into much improved global commodity markets while our financial position remains robust”. Patrice Motsepe ARM Executive Chairman 3
Slide 4: Salient features
Salient features Primary listing JSE Limited Share price ZAR 201.37 per share Market capitalisation ZAR 42.90 billion Market capitalisation (at an exchange rate of R6.98/US$) US$ 6.15 billion JSE ticker symbol ARI Average daily volume traded in preceding 12 476 967 shares per day months 12 month hig
Slide 5: Group structure
Group structure African Rainbow Minerals FaxtM African Rainbow Minerals Gold: Exploration” Harmony Copper 50% Modikwa 50% Khumani 20% Xstrata Coal 50% Konkola North‘? 50% roeake & 55% Two Rivers” 50% Beeshoek South Africa ‘abwe 30% Kalumines & Chrome Bia PGMs & Nickel 50% Nehwaning 50% Nkomati 50% G
Slide 6: ARM strategy
ARM strategy Entrepreneurial Owner operator Profit focused Partner of choice management World-class management team 6
Slide 7: Strong focus on cost control
Strong focus on cost control ARM target for operations on the respective global cost curve by 2012 (ARM estimate, benchmarked at steady-state/normalised production volumes) (2015) 7
Slide 8: Continuing aggressive investment in growth
Continuing aggressive investment in growth ARM’s Portion F2005 – F2010 F2011 – F2013 R13.5 bn R9.5 bn F2005 – F2013 Growth projects + Investment in R23.0 bn completed growth Partners’ Portion F2005 – F2010 F2011 – F2013 F2005 – F2013 R10.8 bn + R8.4 bn R19.2 bn Projected total investment over 9 year
Slide 9: Continued recovery in earnings
Continued recovery in earnings Headline earnings (R million) 3 500 3 272 3 000 2 500 2 232 2 000 1 562 1 500 1 260 1 000 741 659 548 454 500 320 331 19 131 85 0 F2005 F2006 F2007 F2008 F2009 F2010 F2011 First half (1H) Second half (2H) 9
Slide 10: Diversified revenues
Diversified revenues 1H F2010 Revenue - Sales Contribution 1H F2011 Revenue - Sales Contribution Nickel Nickel 8% 11% Iron Ore 21% Iron Ore 30% Platinum 24% Platinum 36% Manganese 28% Coal 4% Manganese Coal Chrome 24% 1% Chrome 7% 6% 10
Slide 11: New project delays
New project delays Environmental permits/ licenses Moving from open cast to underground mining Declining grades Higher operating cost High capital expenditure inflation 5 to 7 years to full production 11
Slide 12: Khumani Iron Ore Mine Expansion
Khumani Iron Ore Mine Expansion 12
Slide 13: Aggressive growth in iron ore continues
Aggressive growth in iron ore continues Export iron ore sales volumes (on 100% basis – million tonnes) 16 14.0 14 12 10.7 9.8 9.7 10 8 7.4 6.9 6.6 5.8 5.9 6 4 2 0 F2005a F2006a F2007a F2008a F2009a F2010a F2011e F2012e F2013e The “a” included in the x-axis refers to actual and the “e” to estimated 1
Slide 14: Delivering quality long-term growth projects: Khumani Expansion Project
Delivering quality long-term growth projects: Khumani Expansion Project Total project cost R6.7 billion approved - project is currently well within budget Capital expenditure to date R4.2 billion (as at 31 December 2010) Full production 2013 financial year - project is currently well ahead of schedu
Slide 15: Khumani loading facility and rail loop
Khumani loading Product Primary facility&and andstockpiles secondary rail loop load-outon crusher with wagons station Bruce Farm Length of each train = 3 850 m 12 locomotives Trains = 342 wagons Secondary Crushing Primary Crushing Capacity of train = 34 200 tonnes Scalping Screen Loading facility ca
Slide 16: Further growth: Ore logistics
Further growth: Ore logistics Saldanha export channel Current capacity: 60 mtpa Potential expansion capacity: 93 mtpa (dual product) 16
Slide 17: Nkomati Nickel Mine Expansion
Nkomati Nickel Mine Expansion 17
Slide 18: Aggressive growth in nickel continues
Aggressive growth in nickel continues Nickel sales volumes (on 100% basis – thousand tonnes) 25 20.5 20 17.6 15 14.0 9.7 10 5.3 5.6 5.1 5 4.5 4.5 0 F2005a F2006a F2007a F2008a F2009a F2010a F2011e F2012e F2013e The “a” included in the x-axis refers to actual and the “e” to estimated 18
Slide 19: Delivering quality long-term growth projects: Nkomati Nickel Expansion Project
Delivering quality long-term growth projects: Nkomati Nickel Expansion Project Capital expenditure to date R3.4 billion of budgeted R3.7 billion (as at 31 December 2010) Stage 250ktpm successfully commissioned two months ahead of schedule Full production 2013 financial year Steady state 20 500t nick
Slide 20: Nkomati Nickel Expansion Project
Nkomati Nickel Expansion Project Commodities produced, per annum, at steady state: 20 500 tonnes Nickel 110 000 ounces Platinum Group Metals 10 000 tonnes Copper 1 000 tonnes Cobalt 500 000 tonnes Chrome concentrate 20
Slide 21: Nkomati open pit
Nkomati open pit The final pit will be: 2.8 kilometres long 900 metres wide 280 metres deep 21
Slide 22: Goedgevonden Coal Mine
African Rainbow Minerals Oe Goedgevonden Coal Mine 22
Slide 23: Aggressive growth in coal
Aggressive growth in coal Goedgevonden thermal coal sales volumes (on 100% basis - million tonnes) 8 7 6.7 6.7 6.2 6 5 4 2.9 3 2.4 2.1 2 0.9 1.0 1 0 F2005a F2006a F2007a F2008a F2009a F2010a F2011e F2012e F2013e Domestic thermal coal Export thermal coal The “a” included in the x-axis refers to actua
Slide 24: Delivering quality long-term growth projects: Goedgevonden Coal Mine
Delivering quality long-term growth projects: Goedgevonden Coal Mine Capital expenditure to date R3.5 billion of the budgeted R3.6 billion (as at 31 December 2010) Full production 2011 financial year Steady state 3.5mt local; 3.2mt export – thermal coal Position on cost curve 25th percentile Comment
Slide 25: Goedgevonden open pit and coal handling and processing plant
Goedgevonden open pit Goedgevonden coal handling and processing plant Goedgevonden dragline Coal stockpile 25
Slide 26: Delivering quality growth projects
Delivering quality growth projects Large opencast mines Low cost operations, all below the 50th percentile of the global curve at steady state Long life mines, all in excess of 25 years 26
Slide 27: Delivering quality growth projects
Delivering quality growth projects Mines and plants are well advanced with ramp-up More than 60% of capital expenditure already spent, low capital risk Modern and high technology plants Safe mechanised mining 27
Slide 28: Konkola North Copper Mine
FaxtM African Rainbow Minerals Konkola North Copper Mine 28
Slide 29: Konkola North Copper Project
Konkola North Copper Project Ore resource of 300 million tonnes at 2.57% copper 2.5 million tonne milled yielding 45 000 tonnes copper per annum Commission concentrator – December 2012, full production 2015 Life of mine – 28 years 29
Slide 30: Konkola North Copper Project
Konkola North Copper Project Total capital expenditure – US$380 million (in July 2010 terms) C1 cash cost – US$1.07/lb (45th percentile - 2015) Potential to increase output to 100 000 tonnes copper per annum (including area A production) 30
Slide 31: Aggressive growth in copper
Aggressive growth in copper Konkola North copper sales volumes (on 100% basis – thousand tonnes) 60 50 48.3 48.9 45.6 40.6 40 30 20 17.5 10 0 F2013e F2014e F2015e F2016e F2017e The “e” included in the x-axis refers to estimated 31
Slide 32: The Konkola North Copper Project
The Konkola North Copper Project Total project cost $380 million (in July 2010 terms) Plant commissioning December 2012 Full production 2015 financial year Position on cost curve 45th percentile Comment New commodity in portfolio and first mine outside South Africa 32
Slide 33: New Konkola North By Pass Road
New Konkola North By Pass Road All major contractors already on site US$236 million capital expenditure already contracted (as at December 2010) 33
Slide 34: Growth projects continue
Growth projects continue Attributable capital expenditure by division (R million) 4,000 3 800 3 700 3,500 3 333 3,000 2 779 2 738 2,500 2 000 2,000 1,500 1,000 500 0 F2008a F2009a F2010a F2011e F2012e F2013e ARM Copper ARM Coal ARM Ferrous Two Rivers Nkomati Modikwa F2005 – F2010: R>13.5bn F2011 – F
Slide 35: Further Growth Opportunities
Further Growth Opportunities 35
Slide 36: Delivering company transforming internal growth projects
Delivering company transforming internal growth projects Potential Future Projects • Khumani expansion • Manganese expansion • Smelter expansions • Thermal coal projects • Modikwa expansion • Kalplats Platinum • Konkola North expansion including area “A” • Kalumines Copper Project 36
Slide 37: Growth supported by a robust financial position
Growth supported by a robust financial position EBITDA excluding exceptional items Cash on statement of financial position R million R million 8 000 4 000 7 229 3 513 7 000 3 500 3 039 6 000 3 000 2 660 5 000 4 484 2 500 2 301 3 907 2 000 4 000 2 887 3 103 3 000 1 500 2 014 1 063 2 000 1 552 1 000 1
Slide 38: Questions
FaxtM African Rainbow Minerals Questions We do it better
African Rainbow Minerals — 2nd Annual DB Access Asia Conference 2011 on 6ix