DEUTSCHE BRICS METALS AND MINING CONFERENCE Cynthia Carroll, Chief Executive 2 November 2011
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A CONSISTENT STRATEGY AND SIMPLIFIED ORGANISATION DELIVERING RESULTS Well diversified portfolio (1) Improving productivity performance (3) Platinum Nickel Diamonds 23% 2% 11% 16% 11% 26% 11% Thermal Coal China s share of global consumption 2010 (%) Steel 41% 38% Nickel 33% Platinum 25% Palladium 21% Thermal Coal 11% Imports Iron Ore & Manganese Met Coal Structurally attractive commodities (2) Met Coal 62% Iron Ore 54% (1) Core revenue split (2) Source: AME, Brook Hunt - a Wood Mackenzie company, Johnson Matthey. Thermal Coal represents share of internationally traded market, nickel and copper represent share of world mined production (3) Productivity based on material moved, mined or processed per operational headcount, excluding projects. Kumba refers to Sishen only (4) Source: AME, Brook Hunt - a Wood Mackenzie company, Anglo American Platinum. Represents % of attributable production in lower half of the cost curve (5) In all Nickel operations in H2 150 140 130 120 110 100 90 80 Export Iron Ore Export Hard Coking Coal Nickel (5) Platinum 0% 20% 2009 40% 60% 2010 80% Q1 11 Q2 11 Kumba Delivering commodity positions in lower half of cost curves (4) 2011 2011 2009 2011 2011 2011 Met Coal Platinum 3
Indexed production growth (2010 = 100) MATERIAL GROWTH IN THE SHORT AND LONG TERM 220 > 200 180 160 >65% 140 >35% 120 100 80 60 Nickel PGM Existing operations & approved projects Near term approvals Future growth options Continuing to invest in exploration and restocking the pipeline 40 Met Coal 20 Thermal Coal 0 Iron Ore 2010 2014 Medium term growth Future options Indexed production growth charts exclude Diamonds, Manganese, niobium and phosphates as at 29 July 2011. 4
MOVING TO INDUSTRY LEADING COST POSITIONS Nickel Platinum Export Iron Ore Export Hard Coking Coal 80% 60% 2 nd half cost curve 40% 20% 1 st half cost curve 0% 2015 2015 2009 2015 2015 2015 Anglo American Platinum cost curve based on internal estimates; all other data sourced from 3 rd party data providers. Source: AME, Brook Hunt - a Wood Mackenzie company, Anglo American Platinum 5
LONG TERM DEMAND GROWTH REMAINS HEALTHY Chinese Regional Urbanisation (1) 2009 China s expected growth 2010 to 2018 Heilongjiang Truck output Jilin Xinjiang Huang River Inner Mongolia Beijing Liaoning Car output 85% Hebei Tianjin Tibet Qinghai Shanxi Ningxia Gansu Shaanxi Henan Hubei Chongqing Sichuan Yangtze River Hunan Guizhou Shandong Jiangsu Anhui Shanghai Zhejiang Jiangxi Fujian Urban floor space Steel for ship building 84% 82% Yunnan Xun River Guangxi Guangdong Macau Hong Kong Expressways (Km) 78% >80% 60%-70% <50% 70%-80% 50-60% Hainan (1) The analysis excludes Taiwan. Source: NBS, CEIC, Anglo American Analysis 6
SET TO BENEFIT FROM THE SHIFT IN COMMODITIES DEMAND Chinese share of global demand 60% 50% Nickel 40% Finished Steel Light duty vehicles 30% 20% Polished diamonds 10% 0% 2000 2005 2010 2015 2020 Source: Anglo American Commodity Research 7
Years grade Cu % SUPPLY CONSISTENTLY UNDER DELIVERS Infrastructure project delays industry grade declines, a long term downward trend mine underperformance 04 11e 3 1.7 9.0 1.6 8.0 2 1 1 2 2? 20101.5 planned 1.4 1.3 1.2 7.0 6.0 5.0 4.0 3.0 1.1 2.0 1.0 1.0 0 DBCT 7X Northern Missing Link RBCT Oakajee Port & Rail 0.9 1990 2000 2010 2020 0.0 2004 2005 2006 2007 2009 2010 2011 Pit Walls Strikes Technical Ramp-up Weather Grades Other Source: Anglo American, Brook Hunt - a Wood Mackenzie Company 8
FUTURE SUPPLY WILL BE IMPACTED BY INCREASING CAPITAL INTENSITY $ per t/yr Cu 25,000 20,000 Conc Producers SxEw Annual Prod Scale kt/yr Cu Projects Under Construction Projects Probable 15,000 10,000, 5,000 30 15 5 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: Brook Hunt Wood Mackenzie 9
STRATEGIC PROJECT MANAGEMENT APPROACH Delivering four longwalls in the same region offers fantastic synergy Project Delivery Objectives Our Approach Target Outcomes Benefits Planned growth profile requires a project that: Achieves lower capital costs Provides greater schedule predictability Reduces risk Enhances AAMC s public profile and corporate reputation Enhances SHEC outcomes 1. One standard Longwall & CHPP design 2. Partnerships with Joy Mining Machinery & Hatch 3. Standard organisation structures & integrated resourcing 4. Integrated community engagement and management (Moranbah 2020) 5. Dedicated port terminal of 30 Mt Progressive engineering & management efficiencies & cost reductions Reduced delivery lead times Strategic equipment sourcing Construction safety and productivity gains Improved production ramp-up and operability Team continuity and performance 120% 80% 60% 40% 20% 0% 120% 80% 60% 40% 20% 0% 115% 110% 105% 95% 90% Project Cost 1 2 3 4 Start-up Time 1 2 3 4 Operability 1 2 3 4 Number of Longwalls 10
DELIVERING VALUE FROM A CONSISTENT STRATEGY Consistent strategy and simple organisational structure delivering results Comprehensive improvements undertaken over the last three years Delivering on key near-term growth projects, major volume growth is under way Operations moving down the cost curve Operational improvements realised across businesses Indexed productivity (2) ( = 100) 150 140 130 Kumba 120 110 Met coal Platinum 100 90 Longer term fundamentals remain unchanged 80 2009 2010 Q1 11 Q2 11 Supply challenges and increasing capital intensity underpinned longer term fundamentals Strategic project management is a key enabler for future projects delivery Anglo American is well placed to deliver future growth 220 200 180 160 140 120 100 80 60 40 20 0 Material growth in the short and long term Indexed production growth (2010 = 100) Existing operations & approved projects >35% Near term approvals ($16bn) >65% 2010 2014 Medium term growth Future growth options > Future options (1) basis (2) Productivity based on material moved, mined or processed per operational headcount, excluding projects. Kumba refers to Sishen only 11