RE-IMAGINING MINING TO IMPROVE PEOPLES LIVES Renaissance Capital - - PowerPoint PPT Presentation

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RE-IMAGINING MINING TO IMPROVE PEOPLES LIVES Renaissance Capital - - PowerPoint PPT Presentation

KUMBA IRON ORE LIMITED RE-IMAGINING MINING TO IMPROVE PEOPLES LIVES Renaissance Capital Conference, 27 May 2020 Disclaimer Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are


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RE-IMAGINING MINING TO IMPROVE PEOPLE’S LIVES

Renaissance Capital Conference, 27 May 2020

KUMBA IRON ORE LIMITED

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Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use of forward-looking terminology such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or ‘anticipates’ or the negative thereof or other variations thereon or comparable terminology, or by discussions of, e.g. future plans, present or future events, or strategy that involve risks and uncertainties. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company's control and all of which are based on the company's current beliefs and expectations about future events. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward-looking statement. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the company and its subsidiaries. Such forward-looking statements are based on numerous assumptions regarding Kumba’s present and future business strategies and the environment in which Kumba will operate in the future. Important factors that could cause Kumba’s actual results, performance or achievements to differ materially from those in the forward-looking 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 effects of global pandemics and outbreaks of infectious diseases, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transport infrastructure, 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 permitting and changes in taxation or safety, health, environmental or other types of regulation where Kumba operates, conflicts over land and resource

  • wnership rights and such other risk factors identified in Kumba’s most recent Integrated Report. The forward-looking statements contained in this presentation

speak only as of the date of this presentation and the company undertakes no duty to, and will not necessarily, update any of them in light of new information or future events, except to the extent required by applicable law or regulation.

Disclaimer

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Rewarding employee talent

R5.0bn

Salaries and benefits (FY18: R4.6bn) Contributing to South Africa

R7.8bn

Income tax (FY18: R4.1bn)

R2.6bn

Mineral royalty (FY18: R983m) Supporting local businesses

R13.9bn

BEE business suppliers (FY18: R11.8bn)

R2.4bn

Host community suppliers (FY18: R1.4bn) Building communities

R171m

Direct social investment (FY18: R124m)

Capital efficient, resilient business - improving people’s lives

3 SRI Index Environmental, Social & Governance Investing

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41 35 20 21 17 158 97 77 41 51

2015 2016 2017 2018 2019

LTI TRC

Safety and sustainability is our core value

Safety Health Environment

28 12 2 7 8

2015 2016 2017 2018 2019

▪ Elimination of fatalities framework ▪ Technology enabling improved safety ▪ Leading indicator drives proactive safety

management

▪ Focused on reducing exposure to

  • ccupational hazards

▪ Wellness and disease management ▪ Enhanced environmental management

leading to improved performance

▪ Increased awareness and monitoring

Occupational diseases (new cases) Major incidents (level 3 – 5)

4 3.5 years fatality free 92% voluntary HIV test

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2015 2016 2017 2018 2019 Achieved rehabilitation

targets

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Proactive and dynamic response to COVID

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WeCare: workforce & communities Cash conservation & business continuity

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WeCare supports workforce and communities where it is needed most

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Implement operating protocols

Prevention Response Recovery

Maintain essential services for communities (eg water, energy) Integrated workforce and community screening and testing Ensure safe and healthy operations Community support (incl. health training, food parcels) Support education, job training, healthcare and livelihoods

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800 1000 700 920 960 325

FY18e FY18a FY19e FY19a FY20e

2.4 3.6-3.8 2.8–3.0 0.6 1.2-1.3 0.7-0.9 2.6 1.8-2.0 2.1-2.3

FY19 FY20e FY20 revised

SIB Expansion Deferred stripping 6.6–7.1 5.6

Cash conservation of R1.3bn to further strengthen our balance sheet

Capital expenditure (Rbn) Cost savings against target (Rm)

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5.6–6.1

COVID Response COVID Response

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Sishen

▪ Production:

~ 27Mt (Previous ~ 29Mt)

▪ Waste:

145 – 160Mt (Previous 170 – 180Mt)

Kolomela

▪ Production:

~11Mt (Previous ~ 13Mt)

▪ Waste:

45 – 55Mt (Previous 55 – 60Mt)

Business continuity in challenging times

Total production Total sales

37 – 39Mt

(Previous 41.5 - 42.5Mt)

38 – 40Mt

(Previous 42 - 43Mt)

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Iron ore stocks at port

Construction activity continues to remain seasonally strong in China..

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50 000 100 000 150 000 200 000 250 000 300 000 Jan Apr Jul Oct 2020 2019 2018

Construction steel daily transactions (tonnes per day, 5DMA)

8 13 18 23 28 33 38 Jan Apr Jul Oct

Total steel stocks at mills & traders (MT)

2018 2019 2020

…resulting in continued destock of iron ore port stocks, which has fallen to 4-year low of 107Mt.

50% 60% 70% 80% Jan Apr Jul Oct

National BF Operating Rates (%)

2018 2019 2020 100 120 140 160 Jan Apr Jul Oct

IO Port Stocks (Mt, 41 ports)

2018 2019 2020

…mills’ production continued to improve and has potential further upside …steel inventory overhang now 43% lower than peak level in early March

Dec Dec Dec Dec

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Positioned for recovery

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Production ramping up and healthy stock levels Able to adapt quickly to market dynamics

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Committed to delivering our strategy

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Operating assets at full potential Leveraging endowment Sustainable returns

▪ Enhanced product portfolio ▪ Improved operational efficiency ▪ Cost savings initiatives ▪ Optimisation and efficiencies ▪ Technology and futuremining ▪ Northern Cape exploration ▪ Business resilience ▪ Cash conservation ▪ Capital efficiency

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Q&A

KUMBA IRON ORE LIMITED

RE-IMAGINING MINING TO IMPROVE PEOPLE’S LIVES

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KUMBA IRON ORE LIMITED

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Penny Himlok penny.himlok@angloamerican.com T:: +27 12 622 8324 M: +27 82 781 1888

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