boliden update

29
Intierra/RMG Mining on top Stockholm 26 November 2013 Boliden Lennart Evrell, CEO 2013-11-05 1 Boliden Group

Upload: mining-on-top

Post on 16-May-2015

744 views

Category:

Economy & Finance


2 download

DESCRIPTION

Mining On Top: Stockholm 2013 26-27 Nov 2013 Boliden update – Lennart Evrell, Boliden; CEO

TRANSCRIPT

Page 1: Boliden update

Intierra/RMG – Mining on top Stockholm 26 November 2013

Boliden Lennart Evrell, CEO

2013-11-05 1 Boliden Group

Page 2: Boliden update

A European base metals company

2013-11-05 Boliden Group 2

Aitik

Garpenberg

Tara

Odda

Kokkola

Rönnskär

Bergsöe

Boliden Area

Smelters

Mines

Harjavalta

Zinc, Copper, Gold, Silver, Lead

Mining and Smelting

Global leader in e-recycling

In-house project execution

resources

Tech leader in several fields

Page 3: Boliden update

Base metals market

3 2013-11-05 Boliden Group

Page 4: Boliden update

Long term demand outlook still looks solid

2013-11-05 4 Boliden Group

Källa: IMF, Wood Mackenzie

Cu kg/capita

N11

USA

Indonesia

EU27

CIS

China

Japan

India

Vietnam

Mexico

Turkey

S Korea

0

2

4

6

8

10

12

14

16

0 5 10 15 20 25 30 35 40 45 50 55

GDP per capita PPP thousand US$

Copper, kg

< 5 44%

5-15 33%

>15 23%

Global population Distr. GDP/Capita

Page 5: Boliden update

New supply in copper

2013-11-05 5 Boliden Group

Price

Volume

S D

Page 6: Boliden update

Depletions in zinc

2013-11-05 6 Boliden Group

Price

Volume

S D

Page 7: Boliden update

Capital cost for new projects (capital intensity) US$/tonne Cu equivalent

2013-11-05 7 Boliden Group

Source: Wood Mackenzie

0

5

10

15

20

25

30

1985-99 2000-2012 Future

Greenfield

Highly probable

Probable

Possible

Base case

Historic

0

2

4

6

8

10

12

14

16

18

1985-99 2000-2012 Future

Brownfield Extension - mine

Extension - mine + mill/Sx-Ew modification

Extension - mine +new mill/Sx-Ew ("Greenfield")

Restart

Historic

Page 8: Boliden update

Exploration expenditures – non-ferrous metals bn US$

2013-11-05 8 Boliden Group

Distribution by metal 2013

Source: SNL MEG

Page 9: Boliden update

Cash cost development Copper and zinc

2013-11-05 9 Boliden Group

-100

-50

0

50

100

150

200

250

Realisation

By products

Cost to concentrate

Cash cost C1

Copper industry average

-30

-20

-10

0

10

20

30

40

50

60

70 Realisation

By products

Cost to concentrate

Cash cost C1

Zinc industry average

Page 10: Boliden update

Copper Normal costing cash cost cents/lb

2013-11-05 10 Boliden Group

0

50

100

150

200

250

300

350

400

450

500

0

50

100

150

200

250

300

350

400

450

500

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

C1 + sustainable capex

50th 75th Series1

Average price Max price Min price

0

50

100

150

200

250

300

350

400

450

500

0

50

100

150

200

250

300

350

400

450

500

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

C1

50th 75th 90th

Average price Max price Min price

Page 11: Boliden update

Zinc Normal costing cash cost cents/lb

2013-11-05 11 Boliden Group

0

50

100

150

200

250

0

50

100

150

200

250

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

C1

50th 75th 90th

Average price High price Low price

0

50

100

150

200

250

0

50

100

150

200

250

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

C1 + sustainable capex

50th 75th 90th

Average price High price Low price

Page 12: Boliden update

Head grades are declining

2013-11-05 12 Boliden Group

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

1990 1995 2000 2005 2010 2015 2020 2025

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1990 1995 2000 2005 2010 2015 2020 2025

Zinc & Lead Copper

Page 13: Boliden update

Mine supply to 2017

2013-11-05 13 Boliden Group

Source: Wood Mackenzie, Boliden calculations

Mio tonnes Copper Zinc

Mine capacity 2013 (pre disruptions) 18.1 13.7

New projects +2.1 +0.8

Expansions +1.8 +0.7

Mine closures -0.7 -0.8

Mine capacity 2017 21.2 14.5

Av. annual capacity growth +4.1% +1.4%

Estimated metals demand 2013 17.5 12.6

Estimated metals demand 2017 21.8 15.8

Av. annual demand growth +5.5% +5.8%

Page 14: Boliden update

Boliden 2012 & Q3 2013

2013-11-05 14 Boliden Group

Page 15: Boliden update

Aitik and Boliden area

Mineral reserves unchanged

Mineral resources ‒ large increase but low grades

Reserves & resources increased

Boliden area Aitik

0

500

1 000

1 500

2 000

2 500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Thousands

Inferred Measured/Indicated

Proven/Probable Production*10

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Inferred Measured/Indicated

Proven/Probable Production*10

2013-11-05 15 Boliden Group

Page 16: Boliden update

Garpenberg and Tara

Reserves & resources increased Mineral reserves down, slight increase

in resources

Garpenberg Tara

0

5 000

10 000

15 000

20 000

25 000

30 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Inferred Measured/Indicated

Proven/Probable Production*10

0

5 000

10 000

15 000

20 000

25 000

30 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Inferred Measured/Indicated

Proven/Probable Production*10

2013-11-05 16 Boliden Group

Page 17: Boliden update

Benchmark Ranking Quartile

Year 2013 (numbers rounded) Industry OP Aitik Percentile 1st 2nd 3rd 4th

REVENUE VARIABLES Head Grade % Cu 1.1 0.2 98 ●

Yield % 83 86 26 ●

OPERATING VARIABLES Productivity

Mine t ore/hour 12 40 1 ●

Mill t ore/hour 26 166 0 ●

G&A t ore/hour 53 583 0 ●

Overall t ore/hour 6 31 0 ●

Wage Rate $/hour 31 61 91 ●

Labour Cost $/t 10.2 2.0 12 n Energy Cost $/t 5.7 1.4 0 n Other Costs $/t 20.2 4.6 3 n Cost To Conc $/t 36.1 8.0 2 n

CASH COST

Cost To Conc c/lb Cu 142 138 51 n

Freight c/lb Cu 7 3 34 ●

TC/RC c/lb Cu 27 22 61 ●

Realisation c/lb Cu 34 25 31 n

C1 Cost c/lb Cu 177 163 47 n

Source: Wood Mackenzie

2013-11-05 17 Boliden Group

Page 18: Boliden update

MUSD 2012 2011

Revenues 5,970 6,018

EBITDA ex PIR 919 1,035

EBIT ex PIR 588 747

Financials January to September

2013-11-05 18 Boliden Group

PIR=Process Inventory Revaluation USD/SEK =6.70

Page 19: Boliden update

0

800

1 600

2 400

3 200

4 000

4 800

5 600

6 400

7 200

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2010 2011 2012 2013

R4Q, MSEK MSEK

Quarterly EBIT excl PIR*

Rolling Q EBIT, RHS

Rolling Q EBIT excl PIR*, RHS

Q3 Summary

Revenues 8 471 (9 123) MSEK

EBIT ex PIR* 603 (988) MSEK

‒ EBIT 681 (1 160) MSEK

Vs Q2:

‒ Smelters improved

‒ Mines flat

Free cash flow 436 (310) MSEK

Capex, 1 151 (971) MSEK

‒ 1,510 in Q2

Expansion projects on plan

2013-11-05 Boliden Group 19

* PIR=Process Inventory Revaluation

Page 20: Boliden update

Expansion projects

2013-11-05 20 Boliden Group

Page 21: Boliden update

Project update

Aitik mine production R4Q 34,9 Mt - 37,0 pace in Q3

Silver recovery Kokkola on plan

‒ Start-up Q3 2014

Garpenberg on plan

‒ Underground infrastructure, shafts, concentrator

‒ Start-up first half 2014, full production end 2015

Aitik45 feasibility study

‒ Environmental permit application submitted end of 2012

Laver conceptual study

‒ Ore milling test runs

2013-11-05 21 Boliden Group

Page 22: Boliden update

Expansion Garpenberg

From 1.4 to 2.5 mt of ore/year

New industrial area

New underground facilities and shafts

Average reserve grades

‒ Zinc 5.1 %

‒ Lead 2.0 %

‒ Silver 131 g/t

Start first half 2014

2 mt/year 2014, full production end 2015

Capex SEK 3.9 billion

2013-11-05 Boliden Group 22

Page 23: Boliden update

Concentrator

Page 24: Boliden update

24

Grinding

Page 25: Boliden update

Flotation

Page 26: Boliden update

26

Crusher 700

Page 27: Boliden update

Summary going forward “2013 the in-between year”

Market

Global macro sideways

Demand grows – China drives

Growing copper mine supply

Zinc supply limited growth

Prices flat

Strong SEK

Boliden

Aitik ‒ Low grades through 2014

Garpenberg on lower grades in Q4

Rönnskär stability still an issue

Strategic hedges expired

Expansion projects on plan ‒ Garpenberg

‒ Kokkola

2013-11-05 Boliden Group 27

Page 28: Boliden update

Disclaimer

This presentation has been prepared by Boliden for information purposes only. Nothing in this material shall be construed as an offer or solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction.

This presentation has been prepared as per the indicated date and Boliden does not undertake any obligation to correct or update the information or any statements made therein. Views that may have been expressed may be subject to change without notice.

Certain statements in this presentation are forward-looking and are based on plans, estimates, assumptions, projections and expectations and are subject to risks and uncertainties. In addition to the factors explicitly discussed, other circumstances may also have a material effect on the actual outcome. Such factors include, but are not limited to, general economic or political conditions, fluctuations in exchange or interest rates or metal prices, technological factors, interruptions in supply or production, actions of courts, regulators, governmental agencies, competitors, customers, suppliers, employees or other third parties.

Nothing contained herein shall constitute any representation or warranty as to the accuracy or completeness and Boliden accepts no responsibility or liability as to the accuracy or completeness of the information contained herein. The material may include information from third party sources believed to be reliable. However, Boliden has not made an independent verification of the information provided.

Save as by prior approval in writing, this material may not be copied, transmitted or disclosed, whether in print, electronic or any other format. All rights to the material are reserved.

Boliden does not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from or in connection with any use of this information.

This material has not been reviewed, registered or approved by any authority under any applicable laws.

Page 29: Boliden update

2013-11-05 29 Boliden Group

Metals for modern life