PLZ Mining Indaba 2005 Final without ad

Slide1: 

Mining in Africa: A great opportunity for investment P. Lazarus Zim Chief Executive Anglo American Corporation of South Africa Limited 8 February 2005

Slide2: 

A stable democracy under a sound constitution. 3 peaceful & free & fair elections. One nation, one flag, one anthem. Free press & independent judiciary. An established culture of dialogue and debate to resolve issues. Political transformation has laid the foundation for economic transformation Transformation that has already occurred is often overlooked… South Africa’s political transformation…

Slide3: 

… accompanied by an already remarkable economic transformation

Slide4: 

… accompanied by an already remarkable economic transformation

Slide5: 

… accompanied by an already remarkable economic transformation

Slide6: 

… accompanied by an already remarkable economic transformation

Slide7: 

… accompanied by an already remarkable economic transformation

Slide8: 

Although recent Rand strength largely offset higher commodity prices…

Slide9: 

…growth in mining investment has outstripped that of other sectors

Total Anglo American investment in SA: 

  Rm Rm Rm Rm Rm Rm Rm   Dec Dec Dec Dec Dec Jun     1999 2000 2001 2002 2003 2004 TOTAL CAPEX 4,529 6,425 10,703 13,390 14,030 6,020 55,097 Replacement 4,529 3,047 2,849 4,631 6,463 2,704 24,223 Expansionary - 3,378 7,854 8,759 7,567 3,316 30,874 Acq of subs 6,934 1,624 5,218 9,874 9,034 4,462 37,146 Acq of ass 800 357 205 3,988 542 9 5,901 Acq of JVs - 2,548 16 - - - 2,564 Total 12,263 10,954 16,142 27,252 23,606 10,491 100,708 Total Anglo American investment in SA NB: Money of the day - figures would be higher if adjusted to today’s money

Slide11: 

Selected major authorised projects with capex estimates. Unapproved projects unshaded. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates. Anglo American’s investment programme 2005 2006 2007 2008 2004 FINSCH $130m RPM PH 1 $210m MPONENG $191m TAU TONA $52m PMR Expan. $99m ISIBONELO $65m BLACK MTN $110m RICHARDS BAY $235m MEREBANK $150m RPM PH 2 $444m BRPM $317m CERREJÓN $17m TWICKENHAM $343m KROONDAL $138m UNKI $84m GROOTEGELUK $55m MOAB KHOTSONG $690m CUIABÁ $121m INYANDA $30m Kleinkopje $56m SIGUIRI $52m W.L. TAILINGS $186m RUZOMBEROK $233m TICOR 2 $54m COPEBRAS $22m CHAGRES $21m EL SOLDADO $80m GRASSTREE $106m DAWSON $306m CODEMIN 2 $67m Buxton $173m Dartbrook $55m Collahuasi $288m Approved $6bn global project portfolio… ACP Project $250m Skorpion $454m TICOR 1 $137m

Slide12: 

Selected major authorised projects with capex estimates. Unapproved projects unshaded. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates. 2005 2006 2007 2008 2004 FINSCH $130m RPM PH 1 $210m MPONENG $191m TAU TONA $52m PMR Expan. $99m ISIBONELO $65m BLACK MTN $110m RICHARDS BAY $235m MEREBANK $150m RPM PH 2 $444m BRPM $317m CERREJÓN $17m TWICKENHAM $343m KROONDAL $138m UNKI $84m GROOTEGELUK $55m MOAB KHOTSONG $690m CUIABÁ $121m INYANDA $30m Kleinkopje $56m SIGUIRI $52m W.L. TAILINGS $186m RUZOMBEROK $233m TICOR 2 $54m COPEBRAS $22m CHAGRES $21m TICOR 1 $137m EL SOLDADO $80m GRASSTREE $106m DAWSON $306m CODEMIN 2 $67m Buxton $173m Dartbrook $55m Collahuasi $288m Approved $6bn global project portfolio… …of which $4bn is in Southern Africa ACP Project $250m Skorpion $454m Anglo American’s investment programme

Slide13: 

South Africa post-1994 is a much better place for doing business. Because of South Africa’s size, this has positive implications for the Continent. SA business – often lead by the mining sector - is seeking to expand across the Continent. This is occurring against the backdrop of a highly favourable global environment for mining producers. As well as a renewed global focus on Africa. South Africa: A good story

Slide14: 

* Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Zambia, Zimbabwe. Source: World Bank, World Development Indicators, 2004. SA’s improved performance impacts positively on the Region & increasingly the Continent Due to its size South Africa impacts on the Continent

Slide15: 

Per capita incomes now growing in most countries in Southern Africa & increasingly the rest of the Continent Source: World Bank, World Development Indicators, 2004. SA’s improved performance impacts positively on the Region & increasingly the Continent

Slide16: 

Significant improvement on pre-1994 performance Source: SA Reserve Bank & World Bank, World Development Indicators, 2004.

Slide17: 

SA business as a regional investor Source: Who Owns Whom, Africa Inc, Nov 2004

Slide18: 

Favourable global environment for mining producers. Accompanied by renewed global focus on Africa. As the major source of many of the globe’s unexploited mineral reserves, Africa in particular stands to benefit from the improved environment for mining.

Slide19: 

China's Share of World First-use Metals Consumption (%) 0 10 20 30 40 Copper Zinc Fe Ore Steel Aluminium Nickel Favourable global environment now reinforces improved business climate Source: Anglo American, MSU & Macquarie

Slide20: 

Favourable global environment now reinforces improved business climate Source: Anglo American, MSU

Slide21: 

2005 WEF (Davos) – unprecedented focus on Africa. Strong African presence & participation: Presidents Mbeki, Obasanjo, Mkapa. PM Tony Blair has placed Africa high on the agenda of his G8 & EU presidencies. Awaiting Report of the Africa Commission. Growing consensus that Africa should be assisted in the same structured way as Europe post World War 2. Important proposals from the United States, Britain and France of the funding mechanism. It is vital to synthesise these into one Africa Plan by the G8 Summit in July. 2005: Africa in the global spotlight

Slide22: 

Peace & security are vital. Will make the full exploitation of Africa’s mineral wealth possible. We applaud the AU, Ecowas & President Mbeki’s current peace making efforts. The current focus of time and resources on peace making is necessary. Good for economic development, good for Africa, good for business. Africa in the global spotlight: What we need to do

Slide23: 

Continue to promote investor friendly policies. Ensure regulatory and policy certainty. For example: in SA the rules are clear New Mining legislation Mining Charter. The key challenge and focal area is that of implementation. It is vital to see mineral right conversion early. Continue the fight against HIV-Aids. Africa in the global spotlight: What we need to do

Slide24: 

Promote strong partnerships between government and business. Public Private Partnership (PPP) – much more that a buzzword. PPP is a necessity – especially in mining. Mining projects are high risk, capital intensive, infrastructure and power (energy) hungry. Need the collective and collaborative effort of government and business. Past year: Good experience in relations with DME. Recent Transnet-Kumba MOU on expansion of export capacity and tariff structure is a good example of PPP. Africa in the global spotlight: What we need to do

Slide25: 

Africa’s business challenges are manageable Anglo American sees transformation as a strategic imperative. This is driven at CEO level through the Transformation Committee with strong operational interface. We will continue to focus on: Employment Equity Ownership Procurement Enterprise development

Slide26: 

Anglo American’s BEE track record – Procurement & Enterprise dev. TOTAL TOTAL Rm NOMINAL REAL (since inception) (2003 money) Procurement 9,532 11,142 Development (SMEI’s) 706 783 Large Transactions 13,193 17,382 Future: Continued 20% - 30% per annum procurement growth Major BEE focus in Anglo Platinum, De Beers, Kumba, Mondi, Anglo Coal

Slide27: 

Africa is at a critical historical crossroads. The developed world is indicating its willingness to assist. Global economic circumstances provide a supportive backdrop. Vital that we, as Africa, seize the moment. Confident that mining will play a leading role in driving Africa forwards. Summary & conclusions