zaheer aatc coaltrans bangkok 15nov2012 final
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SOUTH AFRICAN COAL INEMERGING ASIAN MARKETSZaheer Docrat 15 November 2012
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LEGAL DISCLAIMER
The factual information contained in this presentation should not be deemed accurate or current exceptas of the date of issue. Anglo American Thermal Coal does not, do not intend to, and specificallydisclaim any duty to, update or correct such information.
Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer tobuy or sell shares in any jurisdiction.
Information obtained or derived from publicly available sources, that have not been independentlyverified, has been utilised in this presentation and in formulating the views expressed herein. No
representation or warranty is made as to the accuracy, completeness or reliability of any suchinformation.
Any forward looking information or views in this presentation have been prepared on the basis of anumber of assumptions which may prove to be incorrect. Actual results could differ materially from thosedescribed in this presentations as a result of factors including but not limited to the following: adverseexploration or development results; adverse due diligence findings; re-assessments of corporate ordevelopment objectives and requirements; additional technical developments and considerations;
unexpected increases in the costs of producing coal, changes in international coal or transportationmarkets, a rapid change in the value of the South African Rand particularly with respect to the US Dollar,a fundamental slow down in the worldwide economies; and other factors. Interested parties andinvestors are cautioned that any such statements are not guarantees of future performance and that theactual results or developments may differ materially from those projected in the forward-lookingstatements. This presentation should not be relied upon as a recommendation or forecast by Anglo
American Thermal Coal.
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Commodity
group1 Commodities Global rank
Anglo American is a global leader in diversified miningand a large coal producer
1. Core bus inesses only 2. Copper Mine Producer 3. Nickel Mine ProducerSource: Raw Materials Data Iron Ore, 2011; AME modi fied by TDNews cast July 2011; Brook Hunt Credit Suisse es t.2011; Wood Mackenzie Credit Suiss eest. 2011
AngloAmerican employs more than 100,000 employees globallyand is ranked No. 1 in Platinum & Diamonds
We have a broad mining portfolio ... and a global footprint1 2
Metallurgical Coal
Thermal Coal
CopperNickel
Iron Ore
Platinum
# 4
# 3
# 52# 83
# 6
# 1
De Beers # 1
Ferrous Metals
Base Metals
Coal
Diamonds
Platinum
Geographies & mined commodities
The Americas (Canada, Alaska, Chile, Brazil, Peru,Venezuela, Colombia)
Africa (Namibia, Botswana, South Africa, Zimbabwe)
Australia
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Two topics for our discussion todayAgenda
Thermal coal market overview: Asia growth fuelling the industry1
2 South African thermal coal: Competitive offering to Asian growth economies
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60,000
0
Tr$ (2005) at PPP1
120,000
100,000
80,000
202020102000
Global GDP expected to grow between 2% and 4% p.a.,depending on macroeconomics
Forecast
EIU Average
Oxford Economics
Conf Board pessimistic scenario
Conf Board base scenario
Conf Board optimistic scenario
IMF
How is the outlook for your country?
Expected growth
between
2.44.2% p.a.
(3.7% average)
1. Purchasing Power ParitySource: EIU Global GDP estimates and projections as o f Nov 2012; IMF World Econom ic Outlook October 2012; Oxford Economics October 2012; ConferenceBoard Global Economic Outlook January 2012
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Past and future GDP in emerging Asian markets
Even in Base case scenario, GDP growth of ~ 8%expected in selected Asian economies
+8%
Vietnam
Thailand
Philippines
Myanmar
Malaysia
Laos
Cambodia
17
3,074
489
912
618
270
701
16
2,852
449
849
573
252
652
15
2,638
410
791
529
232
605
14
2,445
376
736
491
213
564
13
2,270
346
687
454
197
526
12
2,122
321
648
420
183
494
11
1,979
300
602
391
172
464
10
1,874
277
589
369
160
432
CAGR1 20122017
+9%
+8%
+7%
+8%
+8%
+7%
+9%
Nominal GDP (B$ atpurchasing power parity)
Emerging Asian markets will significantlyoutperform global growth rates
1. Compound annual growth rateNote: Shown is GDP in current prices in US$Source: The Econom ist Intelligence Unit, as of October 23, 2012
http://upload.wikimedia.org/wikipedia/commons/a/a9/Flag_of_Thailand.svghttp://upload.wikimedia.org/wikipedia/commons/6/66/Flag_of_Malaysia.svg -
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World wide economic growth triggers growthin power demandIncreasing wealth drives power use: Developing countries are only starting their journey
Which role will coal play in supplyingthe increased power demand?
Source: EIA; IMF; AA Econ 2012; Comm odity Research;Wood Mackenzie
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Impressive global thermal coal market growth driven
by Asian imports
2000Asia Pacific
200
166
2000Atlantic
214
155
Japan, S Korea, Taiwan3ChinaIndiaSEA2Other PacificEurope incl. RussiaNorth AmericaOther Atlantic
2012Asia Pacific
679
297
194
96
60
2012Atlantic
246
184
Compound Annual Growth Rate (CAGR)+xx%
South East Asian countries with coal import CAGR of 19% between 2000 and 2012
Thermal import1coal demand (Mt)
World coal demand today:Pacific imports 3 Atlantic imports1
World coal demand in 2000:Atlantic basin ~ Pacific basin imports1
1. Includes land borne volumes 2. South East Asia 3. North East Asia: Japan, South Korea, Taiwan Source: Wood Mackenzie
+19%
+21%
+48%
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and will continue to shift towards
Asian economies
679
297
194
9660
246
184
746
274
233
13468
275
214
973
289
385
169
88
296
229
1,198
289
551
201
106
309
238
1,526
292
808
228
148
306
228 300
968
279
199
313
226
1,800
2,038
300
1,075
355
251
309
213
+xx%
Thermal import1 coal demand (Mt)
+3%
CAGR
20122030
+8%
+8%
+10%
0%
ChinaIndiaSEA2OtherEurope4North AmericaOther Atlantic NEA3
2012 2015 2018 2021 2024 2027 2030
Compound Annual Growth Rate
South East Asian countries expected to increasethermal coal imports at 8% p.a. until 2030
1. Includes land borne volumes 2. South East Asia 3. North East Asia: Japan, South Korea, Taiwan 4. Incl. Russ iaSource: Wood Mackenzie
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South African exports alreadycovers all major Asian markets
North East Asia6.7Mt
South East Asia2.7Mt
India17.9Mt
Europe1
13.7Mt
Others2.8Mt Middle East
1.5Mt
China9.8Mt
YTD exports
South Africa well positioned tosupply emerging Asian markets
South Africa has exported ~ 55Mt this year, with increases ... ... mainly on Asian routes
"Malaysia's Tenaga seeks more
coal from South Africa"
Reuters, Feb 6, 2011
"South Africa shifted steam coal
exports from Europe to Asia"
US Department of Energy, April 25,
2012
"South Africa a traditional
exporter to Europe has been
sending more shipments to Asia"The Wall Street Journal,
Feb 6, 2012
1. Incl. Turkey, IsraelSource: Richards Bay Coal Terminal; press search
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Exports from South Africa to North East and South EastAsia are growing at ~ 40% p.a.
Taiwan
SouthKorea
Japan
20121
8,3
5,9
1,9
0,5
2011
8,0
3,9
3,5
0,6
2010
5,5
2,8
2,4
0,3
2009
3,2
2,1
0,60,5
+42%
Thailand
Malaysia
20121
3,3
3,0
2011
3,0
2,8
2010
2,8
2,4
2009
1,2
1,0
Indonesia
Mtpa Mtpa
+38%
South African exportsto South East Asia
South African exportsto North East Asia
1. Annualized JanOct dataSource: Richards Bay Coal Terminal
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Delivered prices of South African coal into South EastAsia highly competitive, second to Indonesia
Delivered prices into Port Kelang (Malaysia) from key supply regions
US$/t, Panamax 13m draft
AugJulJunMayAprMarFeb
140
120
100
80
0
United States
Colombia
Jan
Australia
Indonesia
South Africa
Sep
10
90
110
130
Note: Indonesian price adjusted for a CV to 6,000kcal, US coal not adjusted high sulphurSource: GlobalCoal
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Global seaborne thermal coal cost curve showsSouth African coal with low cash costs
Russia
79
VenezuelaChinaAustralia
73
Mozambique
8006004002000
US App
104
CanadaIndonesia
63
South Africa
62
VietnamColombia
53
MtUS (IL)
Saleable seaborne production(energy adjusted) US$ FOB/t
Source: Wood Mackenzie
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Eskom
Otherdomestic
Export
Anglo American Thermal Coal with diversified customerportfolio in terms of regions and industries
AATC high levelproduction destinations AATC exports per region Key industries for AATC coal
Year-to-date (Jan-Oct)
China
Europe3
NEA1
SEA2
Other Pacific
North America
Other Atlantic
India
1. North East Asia: Japan, South Korea, Taiwan 2. South East Asia 3. Incl. Russ ia, Turkey, IsraelSource: AATC
Low inherent moisture 13-15% ash content Good energy content
Higher CV Lower Sulphur
Consistent quality Good blend partner
High Fixed Carbon Low fines content Good AFTs (1250-1500) Uniform quality
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Safety is our Number 1 priority
Strong focus on Zero Harm mindset
Principles
Fatalities
LTI2
22
0
2
6
4
7
4
0
2
20112009
4
20072005 2006
8
201212010
6
2008
1. YTD 2. Lost time injuriesSource: AATC
3133
41
5856
4345
32
2010 201212011
0
20092008200720062005
20
40
60
Ekaya bonus scheme implemented for all
Anglo American Thermal Coal employees
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Social responsibility is of utmost importance to us
Robust implementation of SLP commitments
Progress against Mining Charter BEE procurement spend 2011: R4.15Bn (46.2% of total
influenceable spend) HDSA in Management: 55% (target 40%)
Women in Mining: 17% (target 10%) Women in Management: 19% Women in Technical Occupation 13%
Total spend in community projects:R350 million in the last 5 years
Focus Areas of Social and Labour Plans (SLPs) Infrastructure Education and Skills Development
SMME development Agriculture Environment Sports, Arts, and Culture
Strengthening partnerships with government and NGOs
Guided by the Anglo Social Way
Winter school
classes at Empucukweni
Secondary School
Vegetable garden
at Edward Matjeka
Primary School
Educator Development
Programme
Robust implementation ofSocial & Labour commitments
Source: AA
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Domestic logistics ready for increased exports as railbottleneck partly resolved ...
South Africa's coal is transportedby rail from export mines to port
+5%
2015
81
2014
81
2013
77
2012
73
2011
66
2010
63
Steep growth of 10% p.a. targetedby Transnet for TC rail throughput
1. Transnet financial yearsSource: Transnet 2012 Integrated Report
Facts and figures
Current export volume 73 Mtpa
560km railway line linking coal mines to the port
Double line, fully electrified
Trains stretch 2.5 km, loaded to 20.8 gross Mt
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... and Richards Bay is a world-class coal terminal readyfor export growth
The stockyard Capacity of 8.2 Mt in 102 piles 37 different grades possible
The conveyor network & tipplers 3 000 rail wagons per day 1h27m for tipping 100 wagons
The shiploaders Four rail mounted shiploaders 1x 11kt/h, 1x 10kt/h, 2x 8kt/h
The quay Quay of 2.2 km with 6 berths Handysize, Panamax, Capesize
It's one of the largest exportcoal terminals in the world ... ... with world class port facilities
Facts and figures 24-hour operation Nameplate capacity of 91 Mtpa 19 meter deepwater port
More than 750 ships a year Constantly setting world records...
Loading 409.809 tons of coal in 24h, and 203.384 tons into a single vessel
AATC owns 25% share in RBCTWe are the single largest shareholder with 1.8Mt stockpile space
Source: Richards Bay Coal Terminal, Wood Mackenzie
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Outlook: ~20% of South African thermal coal exportsexpected to go to North And South East Asia
5660
63 62
AATC
2015/16
81
19
2014/15
81
18
2013/14
77
18
2012/13
73
17
Estimated export volumes ... ... and regional split
Mtpa
32%
20%
18%
16%
10%
India
Other Asia
China
Europe
Middle East
Africa
Americas
Other SAproducers
We are looking to grow our business in AsiaHow much will we sell into your country in the future?
Source: Wood Mackenzie; AATC
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