Deutsche Bank BRICS Metals & Mining Conference 2 3 November Stompie Shiels: Executive Director, Business Development

Transcription

1 Deutsche Bank BRICS Metals & Mining Conference 2 3 November 2011 Stompie Shiels: Executive Director, Business Development

2 CONFIDENT ABOUT THE FUTURE OF OUR BUSINESS 2

3 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, plans or objectives. Such forward looking statements may or may not take into account and may or may not be affected by known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of commodities; hazards associated with underground and surface mining; labour disruptions; changes in government regulations, particularly environmental regulations; changes in exchange rates; currency devaluations; inflation and other macro-economic factors; and the impact of the AIDS crisis in South Africa. These forward looking statements speak only as of the date of publication of these pages. The Company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events. 3

4 Group structure 4

5 Significant increase in iron ore revenue contribution F2010 Revenue F2011 Revenue Platinum 29% Nickel 11% Iron Ore 23% Platinum 22% Nickel 10% Iron Ore 35% Manganese 27% Coal 3% Coal 2% Chrome 8% Chrome 8% Manganese 22% 5

6 Earnings profile Headline earnings (R million) F2005 F2006 F2007 F2008 F2009 F2010 F2011 6

7 ARM declared a 5 th consecutive dividend Headline earnings per share and dividends per share (cents per share) F2005 F2006 F2007 F2008 F2009 F2010 F2011 Headline earnings per share Dividends per share 7

8 Robust financial position Net cash/ (net debt) excluding partner loans (R million) Net cash ( 500) (1 500) (2 500) ( 932) (1 307) Net debt (1 855) F2005 F2006 F2007 F2008 F2009 F2010 F2011 8

9 strategy Owner operator Entrepreneurial management Profit focused Partner of choice World-class management team 9

10 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) 10

11 On mine cash costs ARM Ferrous ARM Platinum ARM Coal Accelerated ramp-up of the Khumani Project together with production losses due to higher than normal summer rainfall resulted in increase costs. Nkomati Mine unit cash costs increase due to lower than expected recoveries as the Nkomati Large Scale Expansion ramps up. Capitalisation of costs was terminated as GGV reached steady state. PCB costs were impacted by excessive rain, and delays in the transitioning from underground mining to opencast mining. Approximate on-mine cash cost split Approximate on-mine cash cost split Approximate on-mine cash cost split Electricity 8% Other 14% Electricity 6% Other 19% Other 44% Labour 20% Electricity 2% Labour 47% Consumables 28% Consumables 31% Labour 49% Consumables 32% 11

12 Aggressive growth in iron ore continues Iron ore sales volumes (on 100% basis million tonnes) X 2010 growth strategy F2005a F2010a F2011a F2012e F2013e F2014e The a included in the x-axis refers to actual and the e to estimated 12

13 Logistics Saldanha export channel Current capacity: 60 mtpa Potential expansion capacity: 93 mtpa (dual product) 13

14 Aggressive growth in nickel continues Nickel produced volumes (on 100% basis thousand tonnes) X 2010 growth strategy F2005a F2010a F2011a F2012e F2013e F2014e The a included in the x-axis refers to actual and the e to estimated 14

15 Nkomati Nickel Expansion Project Commodities produced, per annum, at steady state: tonnes Nickel ounces Platinum Group Metals tonnes Copper tonnes Cobalt tonnes Chrome concentrate 15

16 Aggressive growth in coal Goedgevonden thermal coal sales volumes (on 100% basis - million tonnes) X 2010 growth strategy F2006a F2010a F2011a F2012e F2013e F2014e Domestic thermal coal Export thermal coal The a included in the x-axis refers to actual and the e to estimated 16

17 Delivering quality growth projects Large opencast mines. Low cost operations, all below the 50 th percentile of the global curve at steady state. Long life mines, all in excess of 25 years. Limited financial risk on the projects with most of capital already spent. 17

18 Aggressive growth in copper Konkola North copper sales volumes (on 100% basis thousand tonnes) F2013e F2014e F2015e F2016e F2017e The e included in the x-axis refers to estimated 18

19 Significant investment in growth ARM s Capital Expenditure F2005 F2011 F2012 F2014 R16.9 bn Growth projects completed + R10.1 bn Investment in growth F2005 F2014 R27.0 bn Partners Capital Expenditure F2005 F2011 R13.8 bn + F2012 F2014 R9.1 bn F2005 F2014 R22.9 bn Projected total investment over 10 years in growth ±R50 bn 19

20 Growth projects continue Attributable capital expenditure by division (R million)* F2009a F2010a F2011a F2012e F2013e F2014e ARM Copper ARM Coal ARM Ferrous ARM Platinum *The forecasted capital expenditure in 2013 to 2014 is an estimation based on approved projects and projects under consideration 20

21 Conversion of ferrochrome furnaces No. 5 Furnace successfully converted from a ferrochrome furnace to ferromanganese. Conversion of two additional furnaces to be completed by end 2012 financial year. Ferromanganese Production (in tonnes) Ferrochrome Production (in tonnes)

22 Further growth Potential Future Projects Iron ore expansion beyond 16mtpa Manganese ore expansion to 6mtpa Smelter expansions Doubling of Modikwa Platinum Mine Two Rivers Merensky Project Kalplats Platinum project Konkola North Area A Kalumines Copper Project Exploration with Rovuma Resources Thermal coal projects 22

23 A robust growth pipeline 23

24 Strong financial position EBITDA excluding exceptional items R million Cash on statement of financial position R million F2005 F2006 F2007 F2008 F2009 F2010 F F2005 F2006 F2007 F2008 F2009 F2010 F2011 Capital expenditure R million Net cash/(net debt) excluding partner loans R million (1 000) (2 000) ( 932) (1 307) (1 855) F2005 F2006 F2007 F2008 F2009 F2010 F2011 (3 000) F2005 F2006 F2007 F2008 F2009 F2010 F

25 Conclusion ARM has delivered significant growth in the preceding 5 years. Aggressive growth continues. ARM plans to spend R10 billion (on an attributable basis) on capital expenditure over the next three years. Future growth is supported by a strong financial position that will allow ARM to fund its growth. We are confident about long-term future of the commodities we mine. 25

26 Questions Provisional results for the year ended 30 June 2011