CMOC - 洛钼集团 · 6 Global Unique Portfolio Across Diverse Commodities 1) Revenue by Commodity...
Transcript of CMOC - 洛钼集团 · 6 Global Unique Portfolio Across Diverse Commodities 1) Revenue by Commodity...
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DISCLAIMERThe information contained in these materials has not been independently verified. No representation or warranty express or implied is made as to, and no reliance
should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in these materials. It is not the intention to
provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of China Molybdenum Co., Ltd. (“CMOC”) financial or trading
position or prospects. The information contained in these materials should be considered in the context of the circumstances prevailing at the time and has not
been, and will not be, updated to reflect material developments which may occur after the date of the presentation. CMOC, its subsidiaries, shareholders,
affiliates, directors, officers, employees, advisors and representatives shall not have any liability whatsoever (in negligence or otherwise) for any loss or damage
howsoever arising from any use of these materials or contents, nor any other loss or damage arising in connection with these materials.
Certain information contained in these materials constitute forward-looking statements. Forward-looking statements include, but are not limited to, the company’s
growth potential, costs projections, expected infrastructure development, capital cost expenditures, market outlook and other statements that are not historical
facts. When used in these materials, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “propose”, “may”, “will”, “potential”, “should”, and similar
expressions are forward-looking statements. Although CMOC believes that the expectations reflected in these forward-looking statements are reasonable, such
statements involve known and unknown risks, uncertainties and other factors, certain of which are beyond CMOC's control, that may cause the actual results,
performance or achievements to be materially different from those expressed or implied by the forward-looking statements and the forward-looking statements
are not guarantees of future performance or achievement. These risks, uncertainties and other factors include, but are not limited to: general business and
economic conditions globally or in certain jurisdictions; legislative and/or regulatory changes; the behavior of other market participants; fluctuations in the price of
copper and other commodities; fluctuations in currency exchange rates; CMOC's ability to integrate acquisitions; operating or technical difficulties in connection
with development or mining activities; the speculative nature of exploration and development, including the risks of obtaining the necessary permits and licenses;
risks and hazards associated with the business of exploration, development and mining; availability and cost of inputs; availability and cost of shipping; risks of
maintaining licenses and approvals; changes in the tax rates or introduction of new taxes. No assurance can be given that such forward-looking statements will
prove to have been correct. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this
presentation. CMOC disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events
or otherwise, except as required by applicable laws.
These materials should be read in conjunction with CMOC’s unaudited consolidated financial statements for the six months ended 31 June 2017 and other public
disclosures.
This document does not constitute or form part of an offer or invitation to issue or sell or a recommendation to acquire, purchase or subscribe for any securities
nor shall it be construed as calculated to invite any such offer and no part of it shall form the basis of or be relied upon in connection with any contract,
commitment or investment decision in relation thereto.
Agenda
• Group at a glance
• Group Financials
• China Operations
• International Operations
• Closing Remarks
4
CMOC Value Proposition
Our vision is to be a world class, international diversified mining company
1) H1 2016 period compared to H1 2017 period2) Based on Dec 2016 Reserve & Resource statement
TFM NPM
50% 75% 100%25%
2017 Copper Industry Cost Curve
▪ $5.3 b of acquisitions completed in industry low period
▪ 2016 simultaneous execution of 2 major transactions; awarded Platts Deal of the Year
▪ 416% revenue growth 1
▪ Focused in three commodity groups: Base Metals, Specialty Metals & Minerals
▪ Providing the key resources for housing, electric cars, light weight construction, efficient food supply
COMMODITIES THAT SHAPE OUR FUTURE
▪All assets in the bottom half of their respective cost curve
▪Majority of assets with greater than 20yr life 2
▪ Significant expansion potential
LOW COST/Long LifePORTFOLIO
PROVEN ACQUISITION TRACK RECORD
6
Global Unique Portfolio Across Diverse Commodities
1) Revenue by Commodity on H1 2017; 1% Au & Other
MoMolybdenum
China‘s largest producer and World’s 4th largest producer
WTungsten
Largest tungsten concentrate producer in the world
CuCopper
Major producer of Copper in the DRC and Australia (over 250 Kpa)
CoCobalt
World’s 2nd largest producer
PPhosphates
Brazil’s 2nd largest producer
NbNiobium
World’s 2nd largest producer
AuGold
Producer of Gold as a by-product from Northparkes copper mine
44%
Revenue % 1
21%
11%
7%
10%
5%
1%
7
From Humble Beginnings ….
High Quality Assets acquired from Majors and Experienced International Management Executive and Operational teams
1) Yahoo and Google Finance; Market Capitalization as of August 15th 2017
2004
Strategic investment by Private investor
(Cathay Fortune Holdings)
2007
IPO
2008
Setup small International team to focus
on foreign expansion
Dec. 2013
Acquired 80% in Northparkes
JV stake
1 Oct. 2016
CMOC Put/Call supporting BHR acquisition of 24% of TFM
17 Nov. 2016
2012
Listed
Acquired 56% interest in Tenke
20 Apr. 2017
Acquired Niobium & Phosphates Operations
Solid Foundation Assets in Mainland China
1969
Predecessorcompany founded
24 Jul. 2017
RMB 18b raised on a Non-publicIssuance Shares
6 Jul. 2017
New International
Office In Phoenix, AZ
USA
Market Cap. 1
US$18.8b
8
… to a Top 15 Position among Public Mining Companies
CMOC Group provided the highest 12 month stock return to Shareholders
1) Google Finance; Market Capitalization as of August 15th 2017; Ranking excludes unlisted, state-owned enterprises and commodity traders
18.4
19.1
19.3
24.1
20.2
22.6
23.6
29.9
22.9
18.8
51.3
61.2
101.4
81.3
61.5
29%
73%
42%
69%
34%
45%
-7%
48%
-30%
-10%
29%
-21%
100%
-24%
18%
1Yr Stock Price Change (%)Market Cap. (US$ b)1
(HKEx)
9
Outbound M&As Made History
✓ The 3 largest global mining deals completed since 2016
✓ Simultaneous negotiations / executions; complicated deal structure and intense competition
✓ Seized great market window to sign the SPA when the prices of both copper 1 and cobalt 1
were at historical low (USD4,698/ton and USD23,198/ton respectively)
✓ Awarded “Deal of the Year” by S&P Global Platts
1 Copper price is sourced from Bloomberg, cobalt price is sourced from LME.
Announcementdate
Acquirer TargetMain metal
Deal value (US$ mm)
May 9, 2016 CMOC Group56% TenkeFungurume (Freeport)
Copper, cobalt
$2,650
April 28, 2016 CMOC GroupNiobium, phosphates(Anglo American)
Niobium,phosphates
$1,500
November 15, 2016
CMOC Group/
BHR Partners
24% TenkeFungurume (Lundin)
Copper, cobalt
$1,136
February 15, 2016 Sumitomo 13% Morenci (Freeport) Copper $1,000
July 5, 2016 Genterra GoldThompson Creek Metals
Copper $937
June 30, 2016 PT AMI48.5% Batu Hijau(NEM)
Copper $750
March 10, 2016 Boliden Kevitsa (First Quantum) Nickel $712
March 13, 2017 Trevali80% Rosh Pinah & 90% Perkoa(Glencore)
Zinc $400
10
“Timing is everything”
4,000
4,500
5,000
5,500
6,000
6,500
7,000
2015-01-02 2015-04-02 2015-07-02 2015-10-02 2016-01-02 2016-04-02 2016-07-02 2016-10-02 2017-01-02 2017-04-02
SPA date
Closing date
"Preparation", "courage", "incisiveness" and "speed"
9
13
17
21
25
01/2016 02/2016 03/2016 04/2016 05/2016 06/2016 07/2016 08/2016 09/2016 10/2016 11/2016 12/2016 01/2017 02/2017 03/2017
Cobalt price since 2016
LME copper price since 2015
Closing dateSPA date
11
Safety is Critical to Our Success
Note: LTI – Lost time injury ; TRI – Total recordable incidents
NPM
2016 2017 YTD
LTI 2 1
TRI 4 3
Tenke
2016 2017 YTD
LTI 5 3
TRI 19 15
Nb&P
2016 2017 YTD
LTI 6 2
TRI 35 12
1H 20171H 2016
Number of Lost Time Injuries (LTIs per Operation)
1
2
11 1
3
1
0
1 1 1
0
Mar-16 May-16Apr-16Feb-16Jan-16 Oct-16Sep-16Jul-16 Nov-16Jun-16 Dec-16 Jan-17Aug-16 Jul-17May-17Apr-17Mar-17 Jun-17Feb-17
3
1
2
3
1
3
1
China TFM Nb&P NPM
China
2016 2017 YTD
LTI 6 2
Overall safety performance
improvement to date
Providing safe conditions for our people and the local community delivers a motivated and more productive workforce and ensures compliance with local laws.
Overall safety performance improved from 2016 to date:
12
Successful Offering of RMB18 bn A-share Private Placement
✓ The 2nd largest ever 1-year lock-up A-share private placement; The largest ever 1-year lock-up A-share private placement in the non-financial sector
✓ Swift completion of unconditional regulatory approval
✓ 2.15x oversubscription by high-quality investors amid highly challenging market conditions and new selling restrictions enacted by CSRC on May 27th
13
Introduced Sophisticated and Long Term Investors
Shareholding Structure before the A-Share Private Placement
Shareholders# of shares
held (100mm) Shareholding
Cathay Fortune Corporation (A+H in total) 53.33 31.58 %
Luoyang Mining Group Co., Ltd. 53.30 31.56 %
China Securities Finance Corporation Limited 4.30 2.55 %
Other A-share shareholders 21.64 12.81 %
Other H-share shareholders 36.30 21.50 %
Total 168.87 100.00 %
Shareholding Structure after the A-Share Private Placement (Major
Shareholders)
Shareholders
# of sharesheld
(100mm) Shareholding
Cathay Fortune Corporation (A+H in total) 53.33 24.69 %
Luoyang Mining Group Co., Ltd. 53.30 24.68 %
Beixin Ruifeng Fund Management Co., Ltd. 10.26 4.75 %
CCB Principal Asset Management Co., Ltd. 7.77 3.60 %
China Structural Reform Fund Co., Ltd. 7.40 3.42 %
Bosera Asset Management (International) Co., Ltd. 5.26 2.44 %
Hotland Innovation Asset Management Co., Ltd. 5.19 2.40 %
Manulife Teda Fund Management Company Limited 4.78 2.21 %
Minsheng Royal Fund Management Co., Ltd. 4.72 2.18 %
China Securities Finance Corporation Limited 3.13 1.45 %
CITIC-Prudential Fund Management Co., Ltd. 1.74 0.81 %
Other A-share shareholders 22.81 10.56 %
Other H-share shareholders 36.30 16.81 %
Total 215.99 100.00 %
Note: the number of shares held by Cathay Fortune Corporation includes 303,000,000 shares of H-share held by its wholly-owned Hong Kong subsidiary
Cathay Fortune Investment Limited and registered under the name of HKSCC NOMINEES LIMITED
14
Improved Capital Structure and Enhanced Financial Strength
1 The market cap as of July 31, 2017=17.666bn shares of A share*the closing price of RMB7.23 per A share as at July 31+3.933bn shares of H share*the closing price of HK$4.25 per H share as at July 31*exchange rate, which is 0.8614.2Debt-to-asset ratio for Chinalco Mining Corp is as of June 30, 2016 as it has delisted since March 15, 2017, while figures for all the other companies are as ofDecember 31, 2016; the debt-to-asset ratio for CMOC after the private placement is based on its interim report 2017, assuming that the private placement had been completed, and one third of the proceeds is used to repay the loans for the two outbound acquisitions and two thirds are used to swap for internal funds
● As of July 31, 2017, the market cap of CMOC reached RMB142.1bn1
Debt-to-Asset Ratio2
(RMB100mm)
70.0%
55.7%
88.3% 83.0%75.2%
64.9% 65.1%58.6% 55.6% 51.5% 48.8% 47.8% 44.1%
CMOC(as of June30, 2017)
CMOC(after theprivate
placement)
ChinalcoMining Corp
MinmetalsResources
Freeport Glencore Zijin Mining Vale GrupoMexicoSCCO
AngloAmerican
Rio Tinto BHP JiangxiCopper
Median:58.6%
The scale of assets expanded significantly
879.8
998.9
264.0
442.6
June 30, 2017 After the private placement
Total assets Net assets
Agenda
• Group at a glance
• Group Financials
• China Operations
• International Operations
• Closing Remarks
16
3.68
11.59
2016年H1 2017年H1
5.35
34.81
2016年H1 2017年H1
9.52
51.74
2016年H1 2017年H1
22.60
116.55
2016年H1 2017年H1
H1 Performance Quick Overview
✓ In the first half of 2017, the company realized revenue of RMB11.7 bn, 9.4 bnmore than the same period of 2016 and a YoY increase of 416%
✓ In the first half of 2017, the company realized an EBITDA of RMB5.2bn, 4.2 bnmore than the same period of 2016 and a YoY increase of 443%
✓ In the first half of 2017, the group realized a net profit attributable to shareholders of RMB835 mm, which increased by RMB 323 mm compared to the first half of 2016 and realized a YoY growth rate of 63%; the net profit excluding nonrecurring P&L was RMB1.2 bn, which increased by RMB 792 mm than the first half of 2016 and realized a YoY increase of 215%
✓ The net operating cash flow in the first half of 2017 was RMB3.5 bn, an increase of RMB2.9 bn than the first half of 2016 and a YoY increase of 551%
Revenue (RMB 100 mm) EBITDA (RMB 100 mm)
Net Profit Excluding Nonrecurring P&L and Attributable To ParentCo (RMB 100
mm) Operating Cash Flow (RMB 100 mm)
2016 H1 2017 H1 2016 H1 2017 H1
2016 H1 2017 H1 2016 H1 2017 H1
17
Balance Sheet Metrics
(RMB 1,000) 2017.06.30
Total Assets 87,980,415
Total Liabilities 61,579,606
Net Assets 26,400,809
Net Asset per Share(RMB) 1.108
Total Liability to Asset Ratio 69.99%
Total Debt 45,877,651
Cash Equivalents 11,290,161
Net Debt 34,587,490
Net Debt to Asset Ratio 39.31%
Balance sheet metrics in 2017 1H
18
Income Statement Metrics
Metrics (RMB 1,000) 2017H1 2016H1 %change
Revenue 11,654,941 2,259,852 416%
Net profit excluding nonrecurring P&L and attributable to parent company 1,159,120 367,532 215%
EBITDA 5,174,109 952,302 443%
EBITDA Rate 44% 42% 4.8%
EPS (RMB/Share) 0.05 0.03 66.7%
EPS excluding nonrecurring items (RMB/Share)
0.07 0.02 250%
Income statement metrics in 2017 1H
19
Cash Flow Statement Metrics
Metrics (RMB 1,000) 2017 H1 2016 H1 %Change
Net operating cash flow 3,481,412 534,958 551%
Net free cash flow 2,824,275 680,791 315%
Net operating cash flowper share (RMB/Share)
0.21 0.03 600%
Cash Flow Statement Metrics in 2017 1H
20
Breakdown of Revenues
Revenue
Copper/Gold8.4 7%
Niobium8.5 7%
Copper and
cobalt67.6 59%
Other0.8 1%
巴西
刚果(金)
NorthparkesCopper/Gold
San Dao Zhuang Molybdenum/Tungste
n
Shang Fang GouMolybdenum/Iron
Xinjiang ProjectMolybdenum
Niobras/CopebrasNiobium/Phosphate
Tenke FungurumeCopper/Cobalt
RMB 100 mm Molybdenum Tungsten
17.3 15%
Phosphate 13.0 11%
Agenda
• Group at a glance
• Group Financials
• China Operations
• International Operations
• Closing Remarks
CMOCCHINA
CMOC PARENT COMPANY
Sandaozhuang Mine
Shangfanggou Mine
Xinjiang project
Luoyang
REGIONAL OFFICES
Beijing
Shanghai
Hongkong
23
CHINAMine operations in
Luoyang City, Henan Province
Offices in Beijing, Shanghai and Hong
Kong
1969predecessor
company founded in China
CMOC’s Sandaozhuang mine is one of the largest reserves of molybdenum and the second largest reserves of tungsten in the
world.
CHINA LARGEST producer of Molybdenum
LARGEST global
producer of tungsten
16kt Molybdenum & 10kt Tungsten
production in 2016
COMMUNITIESAwarded “Pioneer on Donation and Poverty Relief” by Luanchuan
County government for several consecutive years actively engaged in charity activities including poverty
relief campaignsDonation in 2017 H1 is
RMB17m
24
Performance Overview
Moly & Tungsten Revenue (100mm RMB)
Moly & Tungsten GP Ratio(%) Moly & Tungsten Net Income attributable to
Parent Company(100mm RMB)
Moly & Tungsten GP (100mm RMB)
25
Performance Overview
Molybdenum Production(Ton) Tungsten Production(Ton)
Cash Cost of Molybdenum(RMB /Ton) Cash cost of Tungsten(RMB /Ton)
12,080
15,653 16,671
16 H1 16 H2 17 H1
55,153 55,951
54,353
16 H1 16 H2 17 H1
8,008 8,294 8,161
16 H1 16 H2 17 H1
4950 5168
5649
16 H1 16 H2 17 H1
Budget Cash Cost:RMB55.3K/Ton—RMB61.1K/Ton
Production Budget: 16K ton
Budget Cash Cost:RMB13.8K/Ton—RMB15.2K/Ton
Production Budget: 11K ton
26
8.00
10.00
12.00
14.00
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17APT
4.00
5.00
6.00
7.00
8.00
9.00
Jan-16 Apr-16 Jul-16 Sep-16 Dec-16 Mar-17 Jun-17 Ferromolybdenum (60%)
5.00
6.00
7.00
8.00
9.00
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17Black Tungsten (65%)
600
800
1,000
1,200
1,400
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17Molybdenum Concentrates ≥47%
Molybdenum and Tungsten Price Movement in China
Source: molyworld.com; cnfeol.com and comelan.com
Molybdenum Concentrate Market
Ferromolybdenum Market
Tungsten Concentrate Market
APT Market
RMB 10,000/ton
2016 1H: 66.8K/MTU
2017 1H: 77.3K/MTU
2016 1H: 6.44/ton
2017 1H: 7.85/ton
2016 1H: 862/MTU
2017 1H: 1,115/MTU
RMB/MTU
2016 1H: 10.53K/ton
2017 1H: 11.96/ton
RMB/MTU
RMB 10,000/ton
Molybdenum Historical Prices Tungsten Historical Prices
0
100,000
200,000
300,000
400,000
500,000
04-2004 07-2008 10-2012 02-2017
Ferroniobium (60%, China)
427,000
0
30,000
60,000
90,000
120,000
150,000
180,000
04-2004 07-2008 11-2012 02-2017
WO3 (65%,China)
159,000
Agenda
• Group at a glance
• Group Financials
• China Operations
• International Operations
• Closing Remarks
28
An Introduction to our International Operations
World Class Assets Across 3 continents
Tenke (TFM)
Northparkes (NPM)
China Moly
Niobras/Copebras
Copebras
Phoenix, Arizona, USAInternational Headquarters
Sydney Regional Office
London Sales&Mkt
Office
Singapore Sales&Mkt
Office
1) 2016 Production figures2) Nothparkes 100% production
▪ 9kt Nb; 1,200kt fertilisers▪ 3,500 employees &
contractors▪ Mine Life: +16yrs Nb &
+46yrs Phosphates
▪ 216kt Cu & 16kt Co as by-product 1
▪ 7,000 employees & contractors
▪ Mine Life: +25yrs
▪ 46kt Cu & 36koz Au as by-product 1, 2
▪ 420 employees & contractors
▪ Mine Life: +20yrs
TFMRegional Office
CMOC InternationalAFRICA
TENKE FUNGURUME MINING (TFM)
TFM (Mine)
REGIONAL OFFICES
Lubumbashi & kolwezi
Kinshasa
Johannesburg
30
Tenke, one of the largest/highest grade copper-cobaltresources in the world.
DRCMine and Processing
Facilities located between the towns of Tenke and Fungurume
2nd LARGEST global producer
of cobalt
216kt Cuproduction in 2016
with 16kt Co as by-product
2009Beginning of Copper
and Cobalt processing activities
COMMUNITIES98% local employment
TFM Social Community Fund contributions of $27M
since 2009TFM Community
Developmentsupporting Health, Education,
Economic Development
31
TENKE H1 Overview
C1 Cost reduced dramatically given favorable Cobalt prices
Note: H1 2016 & H2 2016 Freeport Ownership (Quarterly & Annual Reports); H2 2016 CMOC from the completion date (17/Nov./2016) to the end of the reporting period
▪ Solid operational performance despite historically high wet season
▪ Strong cost control & cobalt price credit resulting in lower first quartile cost position
▪ Full year production guidance: ▪ 210 kt – 220 kt Cu▪ 16 kt – 18 kt Co
Production (kt) & Cash Cost (US$/lb)
H1 2016
23
109
H2 2016
111
88
H1 2017
105
CMOC Non-CMOC Ownership
9
H1 2016
7 7
62
H1 2017H2 2016
Non-CMOC OwnershipCMOC
Copper
Cobalt
1.16 0.28
C1 Cost
32
Copper cost curve positioning
Copper assets in the lower first quartile
Source: SNL Mine Economics for Primary Copper Mines Only and Company Data (FY 2017e)
50
0
150
250
200
-50
100
Cash Operating Cost(US$ cents/lbs)
Cumulative Paid Copper (K ton)
2017 Copper Industry Cost Curve
TFM NPM
50% 75% 100%25%
CMOC InternationalBRAZIL
NIOBRAS
Ouvidor, Goiás state
Catalão, Goiás state
COPEBRAS
Ouvidor (Mine)
Catalão (Chemical Plant)
Cubatão (Chemical Plant)
REGIONAL OFFICE
Cubatão, São Paulo state
34
BRAZILMine located in Catalão and processing plant in Ouvidor, both in Goiás
state
1976Beginning of niobium processing activities in Ouvidor, Goiás state
2nd LARGESTglobal producer of niobium
~9,000 tons of Nb
annual capacity
Product exported to steel mills in Europe, North America and Asia.
COMMUNITIES 1Social Investments of
BRL 2.5 MILLION in the communities of Catalão, Ouvidor and
Cubatão, São Paulo state
1) Communities related information refers to the combined operations in Brazil
35
Brazil is an agricultural powerhouse serving the world’s food demand. Fertilizer is one of the key enablers.
BRAZILMine and processing
plant located in Ouvidor, chemical plants in
Catalão and Cubatão
1954Beginning of Copebras
operations
~1,200,000annual capacity
2nd LARGEST supplier of phosphate
fertilizers in Brazil
COMMUNITIES 1
More than BRL 247 MILLION negotiated
with local suppliersTHOUSANDS OF JOBS generated in Catalão and
Ouvidor
1) Communities related information refers to the combined operations in Brazil
36
NIOBIUM H1 Overview
Additional volume successfully placed in the market
Note: H1 2016 & H2 2016 Anglo American Ownership (Interim & Annual Reports); H2 2016 CMOC from the completion date (1/Oct./2016) to the end of the reporting period
▪ Recently constructed BVFR plant doubling production capacity
▪ Volume growth of 65% compared with H1 2016, successfully placed into the market
▪ Full year production guidance: ▪ 8.5kt – 9.0kt Nb (in FeNb)
NIOBIUM PRODUCTION (TONS)Nb Production (kt)
+65%
H1 2017
4.3
2.1
4.0
H1 2016
2.6 1.9
H2 2016
CMOC Non-CMOC Ownership
37
PHOSPHATES H1 Overview
Operations supported by continued strong safety performance
Note: H1 2016 & H2 2016 Anglo American Ownership (Interim & Annual Reports); H2 2016 CMOC from the completion date (1/Oct./2016) to the end of the reporting period
▪ Strong safety performance; H1 LTI-free▪ Production mix optimized to capture best
margin returns▪ Implementation of a series of Kaizen &
similar process analyses giving rise to incremental low / no capex production capacity improvements
▪ Full year production guidance: ▪ 1,170kt – 1,180kt fertilizer products
H1 2017
547
303
607
H1 2016
561
304
H2 2016
CMOC Non-CMOC Ownership
Fertilizer Production (kt)
391 Northparkes 100% production
One of the world’s most automated underground mines.
AUSTRALIA27km north west of the Parkes township in the Central West
of New South Wales, Australia
1994Beginning of Northparkes operations
46kt Cu production in 2016
with 36koz Au as by-
product 1
COMMUNITIES98% local
employment, AUD 31.3 million spent with local suppliers
40
NPM H1 Overview
Productivity improvements and a re-baselining of costs
Note: 1) Annualised basis2) Northparkes 100% production
▪ 129 days injury free▪ Productivity improvements expected to deliver record
performance▪ $6-8 million 1 of cost savings delivered
▪ Full year production guidance: ▪ 42kt – 45kt Cu 2
▪ 32koz – 36koz Au
Production & Cash Cost (US$/lb)
0.870.930.69
H2 2016
18
H1 2016
19
H1 2017
23+20%
CMOCC1 Cost
+32%1520
14
H1 2017H2 2016H1 2016
Gold (K Oz)
Copper (Kt)
41
CMOC International Revenue distribution
Growth perfectly timed to benefit from price improvements
1) Tonnage expressed in copper equivalent tons
Gold & Other2%
Cobalt25%
Niobium8%
Copper52%
Phosphates13%
Revenue Distribution by Commodity
1.50
2.00
2.50
3.00 H1 2016
LM
E C
op
pe
r P
rice
(U
S$
/lb
s) H2 2016 H1 2017
Price Change:
+15% +6% +8%+4%
15,000
25,000
35,000
45,000
55,000
65,000
LM
E C
ob
alt
Pri
ce
(U
S$
/to
n) H1 2016 H2 2016 H1 2017
Price Change:+36% +83% -3%+1%
22
+1,007%
H1 2017
319
132
4247
22
62
H1 2016
27
Niobium
Copper
Cobalt
Fertiliser & animal feed productsGold
Production by Commodity 1
42
C1 Cost for Copper Assets Significantly below the “Break-even Point” Copper price, which has potential for sustainable growth
Source: Wood Mackenzie (Q4 2016), company announcement1 According to the definition by Brook Hunt, C1 cash costs include expenses for mining, grinding, refining, field management, tax on mine, transport and sales, with the value of associated mine deducted2 C1 cash costs for NPM and Tenke in 2016 are disclosed on their annual reports
Historical copper price is constantly higher than 90th percentile
of C1 cash cost curve1
1,786
2,558
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
US
D/T
on
90th percentile Historical average copper price
NPM² Tenke²
Tightly Balanced for copper supply increase
The price required for inspiring introduction of new capacities
(2016A)
Short supply of refined copper drives a rebound in price
0
10
20
30
40
1992 1997 2002 2007 2012 2017 2022 2027
mm
to
ns
Base Case Production Capacity Highly Probable Projects
Probable Projects Possible Projects
Primary Demand
2,000
4,000
6,000
8,000
10,000
12,000
(400)
(200)
0
200
400
600
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
US
D/to
n
1,0
00
to
ns
Surplus/(deficit) Copper price
$7,275/Ton
43
0
5,000
10,000
15,000
20,000
25,000
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2016 2017 2018 2019 2020 2021
HEV (LHS) PHEV (LHS) EV (LHS) Demand for cobalt forEV battery (RHS)
Demand for cobalt for lithium EV battery as of the total demand
0
30,000
60,000
90,000
120,000
150,000
2016 2017 2018 2019 2020 2021Metallurgical cobalt Other chemicals Ni-MH/Ni-Cd battery
3C lithium battery EV battery
(Ton)
Deploy Strategic Cobalt Assets for NEV Battery Dividends
Source: CRU (Q1 2017)
Considerable increase in cobalt demandIncrease of EV output leads to greater demand for
lithium-ion batteries
6.6% 9.1%12.1%
14.9%
15.6%
17.5%
The annual increase of
demand will be 16,000 tons
in the next five years
(mm) (Ton)
44
0
10
20
30
40
50
2,000
4,000
6,000
8,000
10,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
LME copper price (LHS) Niobium price (RHS)
(USD/Ton) (USD/kg)
Niobium Is Less Cyclical
Source: Roskill, LME, Ministry of Foreign Trade and Export of Brazil, company information
Because of the peculiarity of niobium industry, niobium is expected to provide stable cash flow for the company in the future and enhance the anti-cycle capacity
Ferroniobium price has been rather stable in history due to CBMM’s
dominance on the supply market, few substitutes for the metal as
well as its small contribution to the cost of iron-steel production
Compared with any new prospective capacities, the current ones are
more competitive in terms of size, grade and cost
(USD/kg niobium)
1.5
CBMMCatalão (CMOC)
Niobec
Panda Hill
Elk Creek
Aley
0
10
20
30
0 0.75 2.25
In production Potential project
Bubble size represents capacity
Nb2O5 Grade
Niobium price has always remained stable and is not sensitive to cycles
Production cost and grade of niobium projectsThe peculiarity of niobium industry
45
100
200
300
400
500
600
700
01-12 11-12 09-13 07-14 06-15 04-16 02-17
Geographical Advantage Helps Generate Stable Profit
Source: Roskill, LME, Ministry of Foreign Trade and Export of Brazil, CRU, Company Information 1 Brazilian MAP CFR price.
Minas
Gerais
Goias
Morro Preto
Chapadão
650km Belo Horizonte
Sao Paulo
CatalãoOuvidor
Coqueiros
Cubatão
10.8%
7.8%
9.7%
% Demand Contribution to National Total by State
Being close to a major farming province is a great benefit
Price History of Phosphorus Fertilizer1
(USD/Ton)
P Supply – BRA (Mt P2O5)
c.55% Imports
2.1 2.0 2.0 2.0 2.0 2.4 2.4 2.4 2.4
2.7 3.1 2.5 3.0 3.1 2.9 3.0 3.2 3.3
2019
5.4
2018
2021
5.7
2020
5.55.0
2016
4.8 5.04.5
5.1 5.2
2014
2015
2013
2017
Imports
Domestic Production
46
Long Lived Assets with Strong Growth Potential
1) As of 12/31/2016 Annual Report2) Life of Mine
▪ Underground resource potential
▪ Longer-term extension options at other areas
▪ New deposit resources potential; Expansion opportunity at Catalão
▪ Greenfield deposit potential
▪ Debottlenecking Project
▪ Other mine area exploration potential
▪ Debottlenecking Project
▪ Heap Leach Project
▪ Sulfide Project
Resources & Reserves (R&R) Mton 1 Expansion OpportunitiesLoM 2
34
836
482
121
182
108
458
232
Resource Reserve
Grade 1
25+ Years
16+ Years
46+ Years
20+ Years
Cu @2.89%Co @0.27 g/t
Cu @2.51%Co @0.31 g/t
Nb2O5 @1.07%
Nb2O5 @0.90%
P2O5 @11.4%Nb2O5 @0.26%
P2O5 @11.9%Nb2O5 @0.36%
Cu @0.56%Au @0.18 g/t
Cu @0.58%Au @0.22 g/t
47
CMOC International – Closing Remarks
A number of short term achievements …
• Strong position across a range of commodities & geographies• Low cost • Exciting expansion opportunities giving notable upside
• Significant niobium production volume increase; Record production rates at Northparkes; Strong production performance at Tenke despite difficult weather conditions
• Successful transition for Brasil and DRC operations (both integration and restructuring)
• Key additional steps taken toward optimization across the operations • Headcount reductions in Northparkes• Production capacity increases in Phosphates with little or no capex investment
• Establishment of CMOC International Office in Phoenix
… Setting the stage for future success
Agenda
• Group at a glance
• Group Financials
• International Operations
• China Operations
• Closing Remarks
49
Looking Ahead
Our vision is to be a leading, international diversified mining company
▪ Lead in health, safety & environmental practices
▪ Hold a world class low cost position in base and specialty minerals & metals
▪ Acquire & diversify markets, products & geography
▪ Optimise existing assets through opportunities to expand production or extend mine life with low relative execution risk
▪ Retain & attract world class international management
▪ Improve production technologies and operational efficiency
COMMODITIES THAT SHAPE OUR FUTURE
TIER 1 / LOW COST PORTFOLIO
TFM NPM
50% 75% 100%25%
2017 Copper Industry Cost Curve
PROVEN ACQUISITION TRACK RECORD