JSE Mining Companies Showcase - Cape Town 11 February 2009
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JSE Mining Companies
Showcase
Cape Town
11 February 2009
Disclaimer
Certain statements in this report constitute forward looking statements that are neither
reported financial results nor other historical information, include but are not limited to
statements that are predictions of or indicate future earnings, savings, synergies,
events, trends, plans or objectives. Such forward looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the actual
results, performance or achievements of the Company to be materially different from the
future results, performance or achievements expressed or implied by such forward
looking statements. Such risks, uncertainties and other important factors include among
others: economic, business and political conditions in South Africa; decreases in the
market price of commodities; hazards associated with underground and surface mining;
labour disruptions; changes in government regulations, particularly environmental
regulations; changes in exchange rates; currency devaluations; inflation and other
macro-economic
macro economic factors; and the impact of the AIDS crisis in South Africa. These
forward looking statements speak only as of the date of publication of these pages
The Company undertakes no obligation to update publicly or release any revisions to
these forward looking statements to reflect events or circumstances after the date of
publication of these pages or to reflect the occurrence of unanticipated events
2
1Perfect diversified commodity mix
ARMI ARM BBEE Trust Institutional and Private shareholders
42% 14% 44%
Additional direct 10% stake into PCB *Transaction in process for
ARM to sell 15%, resulting
in 50/50 JV with Vale
• ARM market capitalisation of R25 billion (US$2.5 billion)
• Black ownership of ARM is 55%
• Listed on the Johannesburg Stock Exchange (JSE) 3
Perfect diversified commodity mix
African Rainbow Minerals Limited (ARM) is a leading, niche diversified mining and minerals company, based in
Johannesburg, South Africa, with excellent long-life low-cost operating assets in key commodities
The company owns ferrous and base metals, platinum and coal operations and holds a significant interest in the
gold mining sector through its shareholding in Harmony. ARM subsidiary TEAL houses ARM's non-South African
exploration portfolio
ARM’s ‘We do it better’ management style is supported by experience and a focus on entrepreneurship, which adds
significant value to its business
An integral part of ARM’s business is the forging of partnerships with key players in the various sectors to ensure
that ARM is at the forefront of technological development and global practices, and has access to key markets and
to value
value-generating
generating growth opportunities
ARM is also well positioned as the partner of choice in South Africa and the rest of Africa
ARM’s organic growth projects with partners remain on schedule and within budget:
• Khumani, Goedgevonden and Nkomati
4
2ARM Strategy:
firing from all 4 cylinders
Operational Organic growth
efficiencies 2 x 2010
Acquisitions Africa / TEAL
Owner operator Profit focused Partner of choice Entrepreneurship
5
Good quality,
cash generative operations
F2008 Attributable EBIT per commodity
FY 2008 ARM Commodity EBITDA margins (excluding exploration and corporate costs)
ARM EBITDA margin was Chrome 13.0%
57% for F2008
Iron Ore 8.6%
Platinum Group Metals 24.4%
Manganese
Nickel 4.1%
Thermal Coal 07%
Nkomati
Manganese 49.2%
Platinum
Coal
Iron Ore
Chrome
0% 10% 20% 30% 40% 50% 60% 70%
6
3JV with Vale on Africa assets
• Capital
• Established relationships in Africa
• Assets
• African business know-how
• Copper project development
• Capital
• Base metals mining experience
7
Sustainable long term
growth of ARM
Goedgevonden Thermal Nkomati Nickel Large
Khumani Iron Ore Coal Scale Expansion
Capex committed 80% 70% 60%
Stage Ramp-up Commission Development
Position on cost curve 40th percentile 25th percentile 40th percentile
Steady state 10mt Iron Ore 3.5mt export; 3.2mt local 20 500t Nickel
Thermal Coal
Commissioning (Calendar year) 2008 2009 2009
Full production (Financial year) 2010 2011 2011
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4When slowdown occurred ARM’s
F2008 Balance Sheet was strong
EBITDA Cash on Balance Sheet
Rm Rm
8 000 7 229 3 000 2 660
7 000
2 500
6 000
5 000 2 000
4 000 1 500
2 887 1 063
3 000 2 032 1 000
2 000 1 156 439
500 288
1 000
0 0
F2005 F2006 F2007 F2008 F2005 F2006 F2007 F2008
Net Debt
(excl partner loans)
Capex Net Debt and Interest Cover Interest cover
Rm Rm x
3 000 2 779 2 300 18
1 792 1 855 16
2 500 1 800
1 961 14
2 000 1 671 1 307 12
1 300 10
1 500
1 037 8
1 000 800 6
4
500 300
-175 2
0 0
F2005 F2006 F2007 F2008 -200
F2005 F2006 F2007 F2008
9
Sustainable Development
The six pillars of sustainable development at ARM:
• Safety
• Occupational Health
• HIV/AIDS
• Environment
• Employment Equity and BEE
• Social investment and local economic development
1 2 3 4 5 6
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5ARM is a growing from a strong foundation
Experienced ARM’s management team has extensive experience (+75 yrs)
Management
Balance F2008 financials indicate ARM’s strong cash position and low net debt
Sheet
Capital ARM invested R8 billion to F2008, ensuring quality assets are grown and maximum
Invested value realised
ARM’s high grade and long life assets are benchmarked to be at the bottom
Quality Assets 50th percentile on the global unit cost curves by 2012
ARM has the building blocks to sustain and grow existing operations
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