Renaissance Capital
Metals & Mining Conference
Bothwell Mazarura, CFO
Timo Smit, Executive Head of Marketing
25 May 2021
2
Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use
of forward-looking terminology such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or ‘anticipates’ or
the negative thereof or other variations thereon or comparable terminology, or by discussions of, e.g. future plans, present or future events, or
strategy that involve risks and uncertainties. Such forward-looking statements are subject to a number of risks and uncertainties, many of which
are beyond the company's control and all of which are based on the company's current beliefs and expectations about future events. Such
statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual
results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward-looking
statement. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks
and uncertainties facing the company and its subsidiaries. The forward-looking statements contained in this presentation speak only as of the
date of this presentation and the company undertakes no duty to, and will not necessarily update any of them in light of new information or future
events, except to the extent required by applicable law or regulation.
Disclaimer
USA Europe ➢ Middle East China ➢ Japan and South Korea
European Marketing Hub
London, UK
3
Geographically diversified customer baseWorld class capabilities
• Value-in-use laboratory
• Price risk management
• Market intelligence
• Integrated sales and
operational planning
• Freight management
• Performance management
World class capabilities, diversified customer base
Shanghai marketing office
China
Kumba Iron Ore
Sishen and Kolomela mines
Asia-pacific marketing hub
Singapore
Saldanha port
Value-in-use laboratory
Pretoria, SA
4
8073
58 54 4938 35
2015 2016 2017 2018 2019 2020 Govttarget
2
23 24 25 26 27 28
36
2015 2016 2017 2018 2019 2020 EU, Japanaverage
• Lump does not require sintering, reducing carbon emissions
• Simplify from 5 to 3 products
• Maintain Fe >64.0%
• Retain lump ratio at ~68%
Well positioned for decarbonisation drive
High quality iron ore products Share of Direct Charge Ores in Chinese Blast
furnaces1 (%)
Beijing air quality (PM 2.5)
1. Mysteel surveyed blast furnaces
5
69
3
28 25
8
Kumba Vale Rio Tinto BHP FMG
115
103
99
98
88
Kumba
Vale
Rio Tinto
BHP
FMG
64.3 63.6
60.7 60.6
57.8
Kumba Vale Rio Tinto BHP FMG
Differentiated by quality
FY20 Fe qualities comparison (%) FY20 Realised price comparison FOB (US$/dmt)¹
FY20 Lump: Fine ratio comparison (%)
Source: Iron Ore Marketing
1: Excluding pellets
30%
42%
47%
38%
2015 2019 4Q20 2020 LT
6
7
16 16
(1.0)
2 1
2015 2019 2020 LT
Lump premium+Fe+Timing
Marketing Premium
6
1817
Price premium over Platts 62 FOB (US$/dmt)Traditional markets¹ share in Kumba’s total sales
Premium driven by ex-China growth and green steel
1. Sales in EU/MENA/Americas | Japan and South Korea
Product
premium
~US$2/t
above market
levels
Traditional
market’s share
45-50%
vs historical
levels
7
Steel production in China at record highs
CISA’s 10-day crude steel run-rates setting new highs Tangshan BF rates <50% reflecting environmental production cuts
Steel inventory destocking on improved downstream demand Steel mill margins and Fe grade spread near record highs
Source : Mysteel, Platts, 1 – Traders, all steel product
1.5
1.7
1.9
2.1
2.3
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CISA 10-day run-rates (Mt/day)
2019 2020 2021
2
7
12
17
22
27
32
37
42
Jan Apr Jul Oct
Total1 steel stocks (Mt)
2019 2020 2021
30
40
50
60
70
80
90
Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
Tangshan BF operating rates National BF operating rates
0
10
20
30
40
0
50
100
150
200
250
300
Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
China hot metal spread,$/t-LHS High grade spread, $/t - RHS
8
Iron ore supply remains relatively tight
Compared to 2011, no significant new supply from majors:
• Majority of new capital deployed in ‘replacement’ projects”
• Infrastructure capacities running at near maximum limits
(Port Hedland at 98% capacity utilisation)
• Vale’s progress slower than expected on “pathway to 400 Mtpa”.
• Higher environmental and social risk to granting of operating licenses
• Growing focus on ESG related issues is here to stay and will play an
increasingly influential role in future investment decisions
Potential increase in seaborne supply over the longer term:
• Simandou - uncertainty around development and market impact
• India - timing and scale of transition from seaborne exporter to importer
• Chinese domestic supply – government agenda of self-sufficiency
Iron ore supply plateauing from Australia and Brazil
Chinese port stocks decreasing driven by record steel production
100
120
140
160
Jan Apr Jul Oct
China iron ore port stocks (Mt, 45 ports)
2019 2020 2021
Mtp
a
0
30
60
90
120
150
180
0
300
600
900
1200
1500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Australia Brazil P62 index
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1: Dry metric tonnes
Safety
4Y/10MFatality free
Total sales
10.3Mt1Q20: 10.7Mt
Total waste
40.3Mt1Q20: 50.1Mt
Finished stock
5.3Mt1Q20: 5.5Mt
Total production
10.7Mt1Q21: 9.6Mt
Average realised FOB export price¹
US$183/t1Q20: US$89/t
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Focused on increasing
throughput
Integrated sales and operational planning
Rail
• Track refurbishment, improve train speed
• Increase operational oversight
• Locust spraying programme
• Preventative maintenance regime
Port
• Simplify from 5 to 3 products
• Increase direct and dual loading
• Larger vessel sizes
• Optimise stockpile at port
1Q21
Finished stock
distribution
(%)
On-mine Port
1Q20
Finished stock
distribution
(%)
4552
5749
83
106
2018 2019 2020
EBITDA margin (%) ROCE (5)
11
Continuing to deliver sustainable value
Acknowledged by the following organisations:
Margin performance
Life of mine to 2040
Capital discipline
Thank you
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