world materials forum 17 june 2021
TRANSCRIPT
World Materials Forum
17 June 2021
HIGHLY RESTRICTED
Who we areAnglo American is a Leading Global Diversified Mining Company
2Anglo American / © 2021
“Our portfolio of world-class competitive mining operations and undeveloped
resources provides the metals and minerals that enable a cleaner, more
electrified world and that meet the fast growing consumer-driven demands of
the world’s developed and maturing economies."
OUR PURPOSE:To re-imagine mining to improve
people’s lives
OUR VALUES:
Key Themes:
3Anglo American / © 2021
Ø Addressing climate change implies increased demand for minerals.
Ø ESG trends imply strong fundamentals for Copper in particular.
Ø Anglo American’s portfolio is transitioning towards a sustainable future.
Ø Anglo American is focused to produce more with less, via its FutureSmart MiningTM programme.
Ø Anglo American is an active participant in the hydrogen economy.
Ø PGMs have a prominent role to play in the hydrogen economy, and new materials applications.
4
Anglo American / © 2021
Global GDP scenariosAlternative scenarios reflect differing pathways for global cooperation, technology development, and wealth
Base Case3.1% 21-40 GDP; ~3⁰C warming
Ø The Covid recovery follows the opening of
economies as vaccines roll out and are
effective on a global basis
Ø Longer term, on-going geopolitical and
economic contention leads to on-going
international tension and uncertainty
Ø The self-interest of key nations prevent open
conflict and foster the continuation of
globalisation, trade, and economic
development
Ø Economic and health concerns dominate
over climate
Ø While the economic recovery from Covid is
reasonably quick and growth resumes, a
few years of growth are “lost” forever
Downside (‘crisis’)2.3% 21-40 GDP; ~3⁰C warming
Ø Slower Covid recovery, weaker economic
environment promotes populism.
Ø Political instability continues. Income
inequality grows
Ø Reduced international cooperation and a
weak investment environment result
Ø Short-termism hampers green development
Ø On-going risk of financial issues results in
on-going caution and a drag on the global
economy
Upside (‘co-op/tech’)3.7% 21-40 GDP; ~2⁰C warming
Ø The Covid recovery teaches us the value of
co-operation, particularly on common issues
solvable through technology.=
Ø Improved global cooperation and revitalised
trade and technology relationships, driving
faster advances in energy efficiency result
Ø Health, environment, climate are prioritised
Ø More stability, and an improved investment
environment allows for positive effect over
the longer term
Ø Development allows for growth in later years
that was difficult to see while recovering
from the Covid years
Source: AA Macro & Commodity Research
5Anglo American / © 2021
Vehicle demand impacted by global GDP scenariosScenarios with differing technology development and wealth see materially different outcomes for the global drivetrain mix.
Source: Macro & Commodity Research, IHSM
“Upside Case” LDV Sales
0102030405060708090
100110120130
“Base Case” LDV Sales“Downside Case” LDV SalesMillion Units
0102030405060708090
100110120130
Global share
2020 2030 2040 2050
BEV 3% 15% 28% 43%
FCEV 0% 0% 2% 4%
Global share
2020 2030 2040 2050
BEV 3% 21% 48% 62%
FCEV 0% 1% 4% 7%
Global share
2020 2030 2040 2050
BEV 3% 5% 5% 6%
FCEV 0% 0% 0% 0%
0102030405060708090
100110120130
203020252015 2020 20452035 2040 2050
1.2 X 1.3 X 1.1 X
6
Anglo American / © 2021
Regardless of global GDP scenario, vehicle drivetrains are becoming more metals-intensive
Source: AA Macro & Commodity Research
FCEVHEVICE PHEV BEV
3 X
Kg/vehicle
3 PGENickelCopper
Light Duty Vehicles
(LDV)
PHEVHEVICE BEV FCEV
3.5 X
Heavy Duty
Vehicles (HDV)
HEVICE PHEV BEV FCEV
>20 X
BEVICE HEV PHEV FCEV
>40 X
PHEVICE HEV BEV FCEV
1.7 X
PHEVICE FCEVHEV BEV
3 X
Kg/vehicle g/vehicle
Note: Ni intensity is based on an NMC622 cathode
7
Resulting in a significant uplift in metals demand, notably copper.Demand for materials related to electrification of the drivetrain are set to grow, despite recycling (shaded) increasing
Source: Macro and Commodity Research. Values are consistent with ‘Base Case’ Outlooks. Shaded area represents proportion of demand satisfied by recycled material
2020 2040
1.25 X
3PGE Copper Nickel Lithium
Primary supply for vehicles
Recycled from
vehicles2020 2040
~20 X
2020 2040
~20 X
k oz Mt kt kt
2020 2040
~2 X
Anglo American / © 2021
8
The supply pipeline for copper needs to expand to the end of the decadeNew projects exist, but project development takes many years and the industry has not been in expansionary mode
Source: Wood Mackenzie LTD, Global Copper Long-term Outlook Q1 2021
5
10
0
25
15
20
30
35
40
20252015 2020 20352030 2040
Base Case Production CapabilityProbable ProjectsPossible Projects
0
5
35
10
15
25
20
30
40
2015 20252020 2030 2035 2040
Primary Copper Demand
Primary copper demand and supply by status
Million tonnes
• Base case supply falls due to grade decline, mine closures and the limited number of committed projects.
• At a similar demand growth rate as the previous two decades, currently known projects could meet demand if supply development picked up significantly.
• However, an accelerated low emissions case would require a combination of a step-change in supply discovery and development, higher scrap collection and demand side substitution from certain applications.
Commentary
An accelerated, low carbon pathway could increase copper demand by 30-40% compared with the current path
Anglo American / © 2021
9
Scrap plays an important role today and collection rates are likely to rise due to high current prices and tighter recycling legislation
Source: Wood Mackenzie LTD, Global Copper Long-term Outlook Q1 2021
0
10
5
30
15
25
20
20152000 2005 2010 2020
Direct use scrapScrap in smelting and refiningPrimary copper
Copper source by type
Million tonnes
4 000
5 000
6 000
7 000
8 000
9 000
10 000
29 30 31 32 33 34 35 36 37 38 39 40 41Scrap as a share of total copper
%
Copper priceUS$/tonne, real
Copper scrap share vs copper price, 2006-2020
Anglo American / © 2021
10
Copper is a preferred metal in many applications, but others – most notably aluminium – can be used if prices warrant a switch
Source: International Copper Association, Substitution Survey 2021
Copper / aluminium price ratio and copper net substitution
Copper/Aluminium ratio
Commentary
Net copper substitution, K tonnes
• Copper has excellent conductivity, ductility and reactivity compared with other industrial metals.
• Trends such as miniaturisation, increasing energy efficiency regulations and undergrounding power distribution cables are long-term drivers of substitution gains for copper.
• However, in the last decade net substitution losses in copper are estimated to account for ~1% of total demand each year.
• Copper offers better conductivity, corrosion resistance and stability compared with aluminium, but substitution will be encouraged if prices remain significantly higher for a long period of time.0
50
100
150
200
250
300
350
400
450
500
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
20142012 202020092008 2010 2011 2013 2015 2016 2017 20192018 2021
Net copper substitution loss
Copper to aluminium price ratio
Anglo American / © 2021
Anglo American is undergoing a portfolio transition….positioned to provide minerals and materials solutions.
11
Anglo American / © 2021
Examples – portfolio transitionGrowth In Future-enabling minerals and materials solutions
12Anglo American / © 2021
Multi-nutrient fertiliser product with a carbon
footprint 85% below that of potash fertilisers.
First fully digital mine with 100% renewable electricity.
Incorporates a suite of FutureSmart MiningTM
technologies.
Delivering a responsible transition
A sustainable future for all stakeholders
+ + -WoodsmithGreenfield crop nutrients project
QuellavecoGreenfield copper project
Thermal CoalExit from South African portfolio
FutureSmart MiningTMExtraction of minerals with optimal efficiency
13Anglo American / © 2021
Example: Bulk Ore Sorting
Up to 40% less waste processed
Example: Coarseparticle recovery
Up to 85% water recovery withhydraulic dry stack
Example: Microwave
Up to 20% reduction incomminution energy
14
Hydrogen – a new energy frontierWith lower costs, hydrogen can be expected to see increasing application as an energy carrier in difficult-to-decarbonise sectors such as industry and transport.
Overall cost reduction for electrolysis – PEM plants Share of hydrogen in final energy demand in 2050
Anglo American / © 2021
15Anglo American / © 2021
PGMs are still seeing new applications emergeSpurring Green Tech Development and efficiency on multiple fronts
Partner
“PGMs for the battery of tomorrow while improving the battery of today”
Pd (and Pt) solution to improve lithium-sulphur, lithium-air & lithium-ion batteries
PdPt
PGM filter pack that delays ripening of produce to reducing food waste in the B2B chain
Furuya Eco-Front Tech for Refrigerators
PGM-containing scavenger to keep food fresh for longer, and deodorising air, reducing waste in the B2C chain
Pt
Pd
Conclusion
16Anglo American / © 2021
Anglo American provides many of the essentialmetals and minerals that are fundamental to thetransition to a low carbon economy and enabling acleaner, greener, more sustainable world…
…doing so with industry-leading efficiencyand with innovative technologies….
…in an industry that supports ~45% of theworld’s economic activity, directly orindirectly…whilst disturbing only 0.04% of theearth’s surface.
Thank you
Anglo American / © 2021 17
Anglo American is leading the mining industry in developing hydrogen ecosystems
18Anglo American / © 2021
The SMART Power mine-site turnkey solution
To mine operations
Supply hydrogen (H2)
Supply renewable electricityH2 supply
Zero carbon mine trucksPower Plant Module (PPM)
Mining
Other PPM applications:
Non-mining
Core offering
Additional options in the broader H2 industry opportunity
Convert to H2
To refuel trucks
Growth opportunities