21 st International Iron Ore Symposium

Transcription

1 21 st International Iron Ore Symposium David Trotter Head of Global Sales Iron Ore Anglo American Iron Making : The drive for efficiency in global operations and the importance of European Supply Stability 1

2 CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American plc ( Anglo American ) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following conditions. This presentation is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy shares in Anglo American. Further, it does not constitute a recommendation by Anglo American or any other party to sell or buy shares in Anglo American or any other securities. All written or oral forward-looking statements attributable to Anglo American or persons acting on their behalf are qualified in their entirety by these cautionary statements. Forward-Looking Statements This presentation includes forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding Anglo American s financial position, business and acquisition strategy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American s products, production forecasts and reserve and resource positions), are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Anglo American s present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American s actual results, performance or achievements to differ materially from those in the forwardlooking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the availability of mining and processing equipment, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American s most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forwardlooking statements. These forward-looking statements speak only as of the date of this presentation. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the Takeover Code ), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in this presentation should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share. Certain statistical and other information about Anglo American included in this presentation is sourced from publicly available third party sources. As such it presents the views of those third parties, but may not necessarily correspond to the views held by Anglo American. No Investment Advice This presentation has been prepared without reference to your particular investment objectives, financial situation, taxation position and particular needs. It is important that you view this presentation in its entirety. If you are in any doubt in relation to these matters, you should consult your stockbroker, bank manager, solicitor, accountant, taxation adviser or other independent financial adviser (where applicable, as authorised under the Financial Services and Markets Act 2000 in the UK, or in South Africa, under the Financial Advisory and Intermediary Services Act 37 of 2002.). 2

3 ANGLO AMERICAN HIGHER VALUE ORE FOR EFFICIENT IRON MAKERS: Iron Making : The drive for efficiency in Global Operations especially Europe Anglo American Higher Value Ore : Clarity in offer; Kumba Standard HG Lump ( 64.0% Fe) Minas-Rio BF Pellet Feed ( 67.2% Fe) Kumba Standard HG Fines ( 63.5% Fe ) Minas-Rio Brazil Production Kumba South Africa Production Conclusions 3

4 IRON MAKING : HIGHER EFFICIENCIES USING THE RIGHT PACKAGE OF HIGHER VALUE ORES: The need for higher mill efficiencies.. Lower silica and alumina Lower coke rates, stronger sinter and higher value in use More consistent chemical specifications Stable planning and blending Exacting physical properties High performance rates Stable Product Mineralogy predictable operational control and handling New technology utilisation and advantage use of ultra low silica products - use of finer sizing's -understanding mineralogy Direct feed options Environmental impact,optimizing feed Direct feed stability Less recycle fines and burden stability Pure Feeds- Avoiding variable mineralogy Low Phosphorus Mills can be driven by efficiency not phosphorus control 4

5 EBITDA margin 2015 WE AIM TO SUPPLY THE MOST EFFICIENT STEEL PRODUCERS GLOBALLY China Volumes (Mt) 2014/ 2015* Steel Groups Competitiveness Biggest Growth Customers Competitiveness Non China Volumes (Mt) 2014/ 2015* Current :: 75% Lumps, 8% Pellet Feeds, 17% Fines Source Goldman Sachs 5 * Forward Indicative only :Includes scheduled deliveries post June15 and subject to change 5

6 ASSET LOCATIONS BRAZIL: New Higher quality BF and DR pellet feed Minas-Rio SOUTH AFRICA: Flagship Sishen Mine and Kolomela Mine Minas-Rio Iron Ore Kumba Iron Ore 1.53Mt Export Sales In last 4 Quarters 42.52Mt Export Sales in last 4 Quarters 6

7 HIGH VALUE KUMBA PRODUCTS : HIGH LUMP RATIO OFFERED TYPICAL PRODUCT QUALITY 1,2 Element KUMBA Lump KUMBA Fines Fe 64.0 % 63.5% SiO % 5.7% Al 2 O 3 1.2% 1.6 % P % % Mn % % LOI 1.0 % 0.7 % >31.5mm 1 % 0 % < 6.3mm 7 % 83% DI -6.3mm 0.9% Moisture 1.3 % 2.6 % Kumba Lump is a well sought after High Quality Feed for use in Blast Furnaces and DRI Plants Globally. Increasingly used in China as a Base Load, High Competency Direct Furnace feed 28.5Mt Global Lump Sales, 12.0Mt Global Fine Sales CY2014 Steady global demand growth for high Fe, low contaminants with consistent supply Improving Offered Quality YOY 1) Two Lower Iron Grade products and other sub grades were discontinued in ) A Higher Specification Lump product at 65.2% is produced to meet existing customers contracts 7

8 OUTSTANDING MINAS-RIO PELLET FEED PRODUCTS OFFERED TYPICAL PRODUCT QUALITY 1 Element BF PELLET FEED Fe 67.2 % SiO % Al 2 O % P 0.043% Mn 0.10 % LOI 0.50 % > 0.15 mm 2.0 % < mm 80.0 % Moisture 8 % Minas-Rio BF Pellet Feed is a well sought after Hematite feed both in Pellet Plants and in efficient Sinter Plants globally Mineralization found to be favorable for low moisture and easy handling at Cape discharge 1) MR DR pellet feed with higher Fe and lower gangue is produced to meet existing customer contracts. 8

9 MINAS-RIO IRON ORE IN PERSPECTIVE

10 MINAS-RIO MINE OVERVIEW World-class itabirite asset Estimated Ore Reserves of 5.3Bt at 39% Fe Minas-Rio Beneficiation Plant Long Reserve Life and Development Potential 605 Mt of initial material free-dig A measured ramp-up of high grade, low contaminant DR and BF pellet feed Fully integrated mine-to-ship infrastructure 11-14Mt scheduled for 2015 Ramp up to 26.5Mt capacity in

11 INTEGRATED INFRASTRUCTURE Fully integrated and expandable mine-to-ship infrastructure with priority port access rights Minas-Rio Project Location 100% owned 529km slurry pipeline Minas-Rio Belo Horizonte Vale Southeastern System Linhares Efficient transportation method already proven and in operation Low Cost of transport Serra Azul Samarco Vale Southern System Vitória N Jointly owned state-of-the-art iron ore terminal at the Port of Açu CSN Port of Açu km Anglo American has priority access rights Potential to expand infrastructure with mine options Pipelines Railroads Low cost and efficiency of operation Port of Itaguaí Rio de Janeiro Ports Mines Slurry Pipeline Filtration Plant Minas-Rio Dedicated Pier 11

12 MINAS-RIO MINE OVERVIEW : VIDEO OVERVIEW 12

13 OUTSTANDING MINAS-RIO PELLET FEED PRODUCT Minas-Rio BFPF Increased market demand for higher quality ore benefits Minas-Rio. Even lower Silica and Alumina are required for DR production. Minas-Rio high quality pellet > feed products Direct reduction > > 68% Fe as DRPF Blast Furnace > 67% Fe as BFPF Very Low Silica and Alumina for DRPF Minas-Rio products are priced on a basis that fully reflects the positive chemical and physical specifications. Source : Anglo Marketing Intelligence using published analysis typical analysis 13

14 EXCELLENT RESULTS FROM EXTENSIVE TESTING Simulation tests were conducted at recognised research facilities in Japan, Europe, China, South Africa and steel plant laboratories with samples of Minas- Rio pellet feed products produced at the Minas-Rio pilot plant The performance of Minas-Rio pellet feed products and its effect on the pelletising and sintering process were rigorously evaluated Resulting products were subjected to relevant chemical, physical and metallurgical analysis Conclusions from research work: Minas-Rio pellet feeds are a valuable feed for the production of high quality pellets in travelling grate or grate kiln furnaces by itself, or in blends Under normal operating conditions Minas-Rio material can be used directly into a sinter raw material blend and up to 40% into a sinter raw material blend utilising pre-agglomeration technologies such as micro-pelletising Lower levels of SiO 2 and Al 2 O 3 in the Minas-Rio products are beneficial for lower slag rates, lower fuel rates, higher productivity and higher flexibility in sinter blend 14

15 KUMBA IRON ORE IN PERSPECTIVE

16 KUMBA IRON ORE - OPERATIONS Annual production of 48Mt 2014 Kumba Operation Locations From three South African open cut mines: Sishen mine (35.5Mt) is one of the largest single-pit mines in the world Kolomela mine (11.6Mt) completed in 2011, operating above design Thabazimbi mine (1.1Mt) with new agreement taking mine from captive to commercial mine Estimated Ore reserves of 1.1 billion tonnes at an average unbeneficiated grade of 60.0% Fe Production increased by 7% to 12.2 Mt in Q following implementation of the MPT berth optimisation, production recovery plan 16 and Anglo American Operating Model

17 KUMBA IRON ORE SISHEN MINE Located in the Northern Cape province near the town of Kathu Mine started in 1953, first iron ore in 1976 Estimated Ore reserves: Mt at 59.1% Fe* Focus on quality, efficiencies and maintaining a low cost base Open pit mine running 24 hours a day, 365 days a year Annual production targeted 38.0 in 2016 *as at 31 December 2014 *as at 31 December

18 KUMBA IRON ORE KOLOMELA MINE Located in the Northern Cape province near the town of Postmasburg The Mine is operating above its original design run rate and can sprint to meet operational needs as required Estimated Ore reserves: 200Mt at 64.4% Fe* Reserve Life: 20+ years 11.6Mt in 2014 The mine is running 24 hours a day, 365 days a year permanent employees LTIFR <0.2* *as at 31 December

19 KUMBA IRON ORE SHIPPING AND LOGISTICS 861 km rail system links Sishen and Kolomela mines to the port at Saldanha Bay Record tonnes >40Mt was railed in 2014 All Kumba s seaborne exports go through the Port of Saldanha The port operates around the clock and has a loading capacity of around 8,000 tonnes an hour, with peaks of up to 10,000 tonnes an hour. The large ore quay at Saldanha has two berths allowing two ships of up to 300,000 DWT to berth simultaneously at the iron ore jetty. A smaller berth of 50-70,000DWT is optimized to meet customer needs 19

20 KUMBA IRON ORE PRODUCTS AND QUALITY Fe content of two products at Lump 64% Fe, Fines 63.5% Fe. Very hard and compact ore with excellent physical and metallurgical characteristics. Low moisture resulting in easy handling and lower transportation costs. Lump: Fines Ratio 66:34 1. Lump ore ( 66%) Breaks down less during handling and transportation. Excellent thermal shock resistance in the top of the blast furnace Less breakdown during reduction in the top part of the blast furnace 2. Fines ( 34%) Excellent sintering characteristics Very low undersize. 20

21 HIGHER GRADE ORE PRODUCTS AND PELLETS Chart 1: Demand for iron ore products by type (Mt) Chart 2: Seaborne exports of iron ore products/pellets by type (Mt) Lump Pellet Fines 1,991 2,054 Lump Pellet feed Pellets Fines 1,463 1,833 1, , , , , , , ,081 1,159 1,215 1,279 1, , Source: Wood Mackenzie. Iron ore demand for iron making (BF & DRI) is split between fines, lump and pellet

22 INCREASING GLOBAL MARKET FOR PELLET FEED Pellet production and net exports in 2013 (Mt) Global imported pellet feed. (Mt) 22

23 CONCLUSIONS Downstream Oriented approach to Global Iron and Steel Makers with a Unique global In-house Technological Team adding value to Customers and Marketing offers Supply fully targeted to meet the higher value iron ore requirements: Lump Sishen / Kolomela: Kumba Iron Ore, South Africa Pellet feed (DR & BF) Minas-Rio (Q4-2014): Brazil Sinter Fines Sishen / Kolomela: Kumba Iron Ore, South Africa Allows Supply broadly to China, Europe, Middle East, North Asia, SE Asia and India to all of the most efficient global Iron and Steel producers With exciting growth opportunities already emerging: Ramp up of Minas-Rio in Brazil Optimisation of resource utilisation in South Africa Value adding Product and Marketing Options for Customer Globally 23

24 Thank you for your attention and your support 24