AFARAK/METAL BULLETIN SINGAPORE ALISTAIR RUITERS March 2016

Transcription

1 AFARAK/METAL BULLETIN SINGAPORE-2016 ALISTAIR RUITERS March 2016

2 Basis of preparation and disclaimer This presentation contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, expects, intends, may, will or should or, in each case, their negative or other variations or comparable terminology. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within Afarak Group Plc s (the Company ) control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Save as required by law (including the Finnish Securities Markets Acts (746/2012), as amended, or by the Listing Rules or the Disclosure and Transparency Rules of the UK Financial Services Authority), the Company undertakes no obligation to update any forward-looking statements in this report that may occur due to any changes in the Directors' expectations or to reflect events or circumstances after the date of this report 2

3 About Afarak Group. Afarak Group is a chrome mining and minerals producer focused on delivering sustainable growth with a Speciality Alloys business in southern Europe and a FerroAlloys business in southern Africa. The Company is listed on NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK) Listing Finland, Helsinki UK, London Processing plant EWW, Germany Mogale Alloys, South Africa Mining TMS, Turkey Synergy Africa Group (JV) & Vlakpoort mine, South Africa HQ, Sales & Marketing Malta 3

4 Vertically integrated group. MINING PROCESSING PRODUCTS Speciality Alloys TMS (Turkey) Kavak Mine (Turkey) Tavas Mine (Turkey) EWW (Germany) Chome Ore Low Carbon FrCr Ultra low Carbon FrCr Speciality Low Carbon FrCr Afarak Trading (Malta) Sales & Marketing FerroAlloys Vlakpoort Mine (SA) Synergy Africa Group (JV) Stellite Mine (SA) Mecklenburg Mine (SA) Mogale Alloys (SA) Chrome Ore Plasma Charge FrCr Medium Carbon FrCr Silico Manganese 4

5 to a diversified client base. Diversified client mix* USA 27% EU 50% Africa 1% Asia 22% *2015 revenue mix 5

6 Investment remains a priority for Afarak Fines tailing processing plant at Kavak New plant at Tavas New dust exhaustion at EWW Dryer in the ferrochrome plant at Mogale Alloys Replacement of the furnace refractories Acquisition of new plant vehicles Shaking table project at Stellite Mine Bulk sample mining at Vlakpoort 6

7 Market Analysis 7

8 2015 Global RSA Chrome Ore trade flows, excl. UG2 8

9 Import of Chrome Ore into China, incl. UG Jan'16 Feb'16 Mar'16 Apr'16 May' From MT MT MT MT MT MT MT MT MT MT MT MT India 389, , , ,912 62,314 22,832 27,097 27,097 S Africa 3,100,223 4,675,158 4,490,317 6,736,426 5,748,430 7,578, , ,139 Turkey 1,932,859 1,612,325 1,840,274 1,998,420 1,280,206 1,037,076 52,885 52,885 Albania 363, , , , , ,600 47,394 47,394 Australia 200, , , ,775 26, Brazil 76,521 60,270 28, , Iran 349, , , , , ,618 40,328 40,328 Kazakh 242,752 93,930 89, ,311 76,705 8, Oman 901, , , , , ,043 7,794 7,794 Pakistan 511, , , , , ,325 10,420 10,420 Philippines 150, , , ,391 66,574 31, Vietnam 58,675 25,236 1,930 24,990 3, Other 378, , , , , ,539 30,427 30,427 Total 8,666,042 9,444,332 9,299,392 12,062,069 9,383,178 10,401, , ,464

10 2015 Global Ferro Chrome trade flows, excl. China production 10

11 Import of HC / Charge Cr FeCr into China Jan'16 Feb'16 Mar'16 Apr'16 May' From MT MT MT MT MT MT MT MT MT MT MT MT Kazakhstan 489, , , , , ,524 47,571 47,571 South Africa 967,346 1,141, , ,476 1,384,044 1,968, , ,886 India 259, , , , , ,607 14,849 14,849 Zimbabwe 42,988 25,612 34,581 37, ,337 71,481 3,915 3,915 Russia 18,466 9,068 13,634 4,162 5,304 6, Other 42,338 42,341 16,834 50,716 86,031 58,005 6,202 6,202 Total 1,820,606 1,806,803 1,529,736 1,624,898 2,060,156 2,627, , ,423 HS Code: Cr Ore ; Charge Cr:

12 South African Chrome ore vs. ChCr 12

13 World Market: FeCr & SiMn Selling Prices Significant drop in Q4 13

14 Eskom Electricity Price (ZAR c/kwh) European Benchmark FeCr price (ZAR /lb Cr) SA Ferro Alloy Industry: In Crisis Eskom pricing (ZAR c/kwh) and European Benchmark FeCr price (ZAR/lb Cr) Plants closed in 2015/16 Tata FeCr ( tpa) Assmang Mashadodorp ( tpa) Middelburg Techno Crhome (LCFeCr tpa) IC3 at Ferrometals (MCFeCr tpa) IFM ( tpa) ASA closed end of January 2016 ( tpa) BHP Metalloys only running 1 furnace (80 000/ tpa) European Benchmark FeCr Price (R/lb Cr) Eskom price ZARc/kWh (annual) to 2016: Electricity prices have increased from 28c/kWh to 87c/kWh with Electricity cost increasing from 23% to 37% of COP. SA lost market share - higher costs could not be recovered by final product prices 2002 to 2014: China Market share increased from 0% to 40%, while South Africa market share reduced from 50-32%. 14

15 Looking ahead, Afarak remains confident. Committed to continuously review production costs and reorganise structures to reduce overall expenditure Afarak has a strong unleveraged balance sheet with significant growth potential Afarak remains committed to its strategy of managing production levels, increasing its range of speciality products and diversifying its geographic spread of customers Focus on value creation for all its stakeholders 15

16 ALISTAIR RUITERS CEO 16