ANGLO AMERICAN COPPER MITSUBISHI ANALYSTS VISIT 9 10 March 2015 - PowerPoint PPT Presentation

ANGLO AMERICAN COPPER MITSUBISHI ANALYSTS VISIT 9 – 10 March 2015 Los Bronces mine

AGENDA Our strategy Hennie Faul CEO 3 Overview of the Copper business, Craig Fish CFO 9 Performance and Outlook Focus on Los Bronces Juan Carlos Roman VP – Operations Sur 16 Quellaveco Hennie Faul CEO 24 Key risks and Sustainability issues Hennie Faul CEO 26 Summary and Outlook Hennie Faul CEO 29 2

OUR STRATEGY

THE DIVERSIFIED MINER Our strategy and its component parts Responding to a changing world in which: • Mining remains important, but demand growth and prices are normalising The Diversified Miner that takes a • Anglo American has not delivered on its potential values-based approach to business by • A business turn-around is needed alongside long-term together, creating sustainable value that continuous improvement and profitable growth makes a real difference to become partners in the future Four strategic imperatives: • Deliver Driving Value • Focus the portfolio Double our 2014 operating OUR • Develop core business profit by 2020 by : WORLD processes • Focusing on core mining • Create a high performance assets with long-term value culture creation • Maintaining a highly WE Measure progress through a competitive mind-set, with ARE holistic Business Scorecard innovation and delivery at the ANGLO forefront AMERICAN • Developing critical core skills to improve our returns OUR HOW WE AMBITION DELIVER HOW WE WORK TOGETHER The right people in the right roles doing the right work (organisation model) and our structured approach for how we set targets, plan, execute and improve work (operating model) 4

STRATEGY Our approach to building performance is simple…and continuous… Value CAPABILITY Realise Potential Build Capability Establish Stability STABILITY • Operations • Brownfield options • Resource potential • Markets • Debottleneck • Priority capital options FutureSmart TM innovation • People • Operating Model • 2016 2013 Time …establish stability…build a foundation for capability…realise potential. 5

PORTFOLIO AND RESOURCE OPTIONALITY We have focused on “Priority 1” opportunities to reshape the portfolio… Priority growth options • Los Bronces District • Quellaveco • Collahuasi further expansion Portfolio optimisation • Mantos Blancos/Mantoverde – Sale process to commence in H1 2015 • El Soldado/Chagres – in consultation with key stakeholders Quellaveco Collahuasi Los Bronces …and we are prioritising our opportunity pipeline. 6

A STEP CHANGE IN SUSTAINABILITY PERFORMANCE Our ambition is spread across three time horizons… We aim to… …reset global conversations. Change in mining Competitive companies, approach to achieve communities and countries community support all win together Net positive Flourishing impact… Ecosystems… Work with others to From “extractive industry” reshape perception Support employee Environmental and to development partner of mining wellbeing social responsibility Have a net positive Clean, effective and impact on local efficient mines. communities Do No Harm Shared Purpose Provide safe and Employees are moved to healthy workplaces realise our vision To be a valued Employ leading part of society designs and Respect the rights of Relationships with business technology local stakeholders and social partners Honour our licensing Delivering on all of our commitments commitments 2030+ 2030 2016 Integrated into operating model …as we believe this work is “Mission Critical" in our industry. 7

KEY CHALLENGES In looking forward the key challenges are… • External environment – Prices reverting to marginal costs more quickly than expected …places focus on asset quality . • Operating performance – Continuing positive performance improvements …accelerating the pace of the operating model roll-out. • Capital management – Cash flow and balance sheet pressure …intense focus on capital discipline is key. • Restructuring – Refocusing the portfolio …to dedicate time and capital to priority assets. …managing short-term priorities; delivering long-term value potential. 8

OVERVIEW OF THE COPPER BUSINESS, PERFORMANCE AND OUTLOOK

OUR COPPER ASSETS Q Q Quellaveco project AA ownership: 81.9% 1 Collahuasi AA ownership: 44% 2014 Cu production (44%): 207kt 5 Mantos Blancos AA ownership: 100% 2014 Cu production: 52kt 6 Mantoverde AA ownership: 100% 2014 Cu production: 52kt 3 El Soldado AA ownership: 50.1% 2014 Cu production: 32kt 4 Chagres (smelter) AA ownership: 50.1% 2014 anode production: 128kt 2 Los Bronces AA ownership: 50.1% 2014 Cu production: 405kt 10

COPPER RESULTS SUMMARY Copper turnaround since 2012… Production (kt) US$ million FY2012 FY2013 FY 2014 Revenue 5,122 5,392 4,827 775 748 720-750 720-750 710-740 EBITDA 2,288 2,402 1,902 660 EBIT 1,736 1,739 1,193 AA Sur Underlying earnings 941 803 493 Capex – SIB (1)(2) 854 695 572 Capex – Growth (2) 360 264 156 Other Attributable ROCE 29% 25% 18% Realised price (c/lb) 364 326 300 2012 2013 2014 2015 2016 2017 C1 unit cash cost (3) (c/lb) 171 162 169 Driving value delivering results Los Bronces material mined turnaround (Mt) • Primary focus is first on stabilising, then optimising the operations -26% +6% 200 • Los Bronces has stabilised the mine and plant, having caught up on -12% Plan waste backlogs from previous years. 2016 Asset Review targets already 150 Actual met, including: 100 • Record material mined in 2014 of 145Mt vs. 129Mt in 2012 • Continuous ore feed from mine to plant, increasing plant throughput 50 • Greater residence time in flotation plant leading to higher recoveries 0 • Collahuasi mine has been stabilised, with the focus now shifting to the 2012 2013 2014 plant …has delivered excellent results. (1) SIB includes development and stripping capex 11 (2) Capital expenditure on PPE, net of proceeds from disposal of PPE and net of capital expenditure funded directly by non-controlling interests on a cash basis (3) Unit costs presented on a nominal basis

STRATEGY IN ACTION – LOS BRONCES CASE STUDY The business turnaround since 2012 has established stability in 2014… • Implementation of Anglo American Operating Model • Mitigate long term decline in ore grades • Optimise Contractor Services & Productivity • Massive resource endowment • Operational efficiencies • Development of Los Bronces Underground project • Strong focus on compliance to mine plan • Waste backlog caught up • Pit flexibility reinstated • Improve ore flow continuity; Debottleneck plants and increase total throughput Value • Under-delivered on budgets • Waste backlog; development behind plan • Plant processing constraints Realise Potential Build Capability Establish Stability 2012 2013 2014 2015 2020+ We To this in transformed 2014… Los Bronces from this in 2010… 12 …as we move to building capability and efficiency in 2015.

Establish Stability LOS BRONCES OPERATIONAL PERFORMANCE Performance at the Los Bronces mine and plants has significantly improved… Mine extraction (ktpd) Confluencia Plant Feed (ktpd) Confluencia plant feed (ktpd) Control Chart: LB Mine Rock Extraction (ktpd) C o n t r o l C h a r t : C F P l a n t T h r o u g h p u t ( k t p d ) 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2 0 1 3 Q 1 2 0 1 3 Q 2 2 0 1 3 Q 3 2 0 1 3 Q 4 2 0 1 4 Q 1 2 0 1 4 Q 2 2 0 1 4 Q 3 _ _ 700 _ _ _ _ 1 4 0 X = 8 7 , 6 X = 8 8 , 7 X = 9 X = 9 1 , 3 Summer Winter Summer Winter X = 9 1 , 0 X Summer = 8 7 , 7 Winter Summer Winter 600 1 1 1 2 0 1 1 500 1 1 1 1 0 0 1 1 1 1 1 400 d 8 0 d p p t t k k 300 6 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 200 1 1 1 1 1 1 1 4 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Major maintenance 100 1 1 1 2 0 1 1 1 1 1 1 1 1 0 0 1 1 01-01-2013 06-03-2013 09-05-2013 12-07-2013 14-09-2013 17-11-2013 20-01-2014 25-03-2014 28-05-2014 31-07-2014 27-09-2014 1 1 0 1 - 0 1 - 2 0 1 3 0 6 - 0 3 - 2 0 1 3 0 9 1 1 1 - 1 0 5 - 2 0 1 3 1 2 - 0 7 - 2 0 1 3 1 4 - 0 9 - 2 0 1 3 1 1 1 7 - 1 1 - 2 0 1 3 2 0 - 0 1 - 2 0 1 4 2 5 - 0 3 - 1 2 1 1 1 0 1 4 2 8 - 0 5 - 2 0 1 4 3 1 - 0 7 - 2 0 1 4 2 7 1 1 - 0 9 - 2 0 1 4 Material mined (Mt) Mine compliance to plan Confluencia plant operating time (%) 145 91% 94% 78% 92% 67% 129 128 88% 2012 2013 2014 2012 2013 2014 2012 2013 2014 …waste stripping is now back on schedule and mine flexibility has been reinstated. 13

COMMODITY PRICES The near-term pressure induced by lower Copper prices… Indexed commodity price (1 st Jan 2014 = 1) 1.2 1.1 1.0 Platinum (basket) (-2%) 0.9 Met Coal (-16%) 0.8 Thermal Coal (-16%) Copper (-23%) 0.7 0.6 0.5 Iron Ore (-47%) 0.4 01 Jan 14 01 Apr 14 01 Jul 14 01 Oct 14 31 Dec 14 …gives further impetus to our imperative to optimise for the long-term. 14