Mining Address. Ian Smith MD & CEO Newcrest Mining Limited

Transcription

1 Mining Address Ian Smith MD & CEO Newcrest Mining Limited

2 Disclaimer Competent Persons Statement The information in this presentation that relates to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by C. Moorhead, EGM Minerals for Newcrest Mining Limited who is a Member of The Australasian Institute of Mining and Metallurgy, and a full-time employee of Newcrest Mining Limited. Mr Moorhead has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code ). Mr Moorhead consents to the inclusion in this presentation of the matters based on this information in the form and context in which it appears. For details of Exploration Results, Mineral Resources and Ore Reserves refer to the Newcrest website. Forward Looking Statement These materials include forward looking statements. Forward looking statements inherently involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside of the control of, and may be unknown to, the company. Actual results and developments may vary materially from those expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the company does not in providing this information undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Ore Reserves and Mineral Resources Reporting Requirements As an Australian company with securities listed on the Australian Securities Exchange ( ASX ), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act and the ASX. Investors should note that it is a requirement of the ASX listing rules that the reporting of Ore Reserves and Mineral Resources in Australia comply with the JORC Code and that Newcrest s Ore Reserve and Mineral Resource estimates comply with the JORC Code. Exploration Target The potential quantity and grade related to Exploration Targets in this report is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. Refer to Newcrest s detailed exploration summary on our website at 2

3 Contents 1. Newcrest 2. Economy & Mining 3. Employment 4. Education &Training 5. Carbon Tax 3

4 World Class Asset Portfolio Indonesia Gosowong PNG Lihir Island Wafi/Golpu Hidden Valley Telfer Namosi Fiji Bonikro Mt Rawdon Australia Cracow Cadia Valley Producing Asset Advanced Exploration 10 operating mines in 4 countries 4

5 Newcrest Safety Lost Time Injury Frequency Rate Total Recordable Injury Frequency Rate YTD YTD 5 accidents per 1. million work hours 2. ~ 500 people per annum

6 A Major Player Relative Market Capitalisation Newcrest Newcrest is the third largest gold company by market capitalisation. 6

7 Reserve Value In Situ Reserve Value (US$ Billion) Barrick 250 Newcrest 200 Goldcorp 150 Newmont AngloGold Kinross Goldfields Reserve Value as a Multiple of Enterprise Value 7 - Circle diameter represents relative market capitalisation as at 25 February In Situ Reserve Value based on the following metal price assumptions: Gold US$1,350/oz, Copper US$4.50/lb, Silver US$28/oz, Lead US$1.00/lb, Zinc US$1.00/lb, Tungsten US$14/lb - Enterprise value based on market capitalisation at 25 February 2011 and net debt position at 31 December Source: Company Annual Reports, Quarterly Reports and Newcrest expectation of reserves as at June

8 Growth Pipeline Concept & Prefeasibility Feasibility Execution Operation Hidden Valley Mine Ridgeway Block Cave Gosowong Expansion Lihir MOPU Expansion Cadia East Mine Bonikro Hire Mine Hidden Valley Expansion O Callaghans Wafi - Golpu Namosi Two major projects, Two major studies 8

9 Current 5 Year Production Profile 3.75Moz 1 Average ~ 8% pa Growth Lihir Cadia East CVO 2.74Moz LGL 0.98 Hidden Valley Newcrest 1.76 FY2010 FY2014 Future & additional production upside from the following internal opportunities: West Africa, Wafi/Golpu, O Callaghans, Namosi, Gosowong 2, Vertical Stockwork Corridor 9 1 Source: Newcrest and Lihir ASX announcements

10 NCM Market Capitalisation US $ Billion Jun 06 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Newcrest s market capitalisation has grown to over 6 times it s 2006 size in under 5 years. 10

11 Contents 1. Newcrest 2. Economy & Mining 3. Employment 4. Education &Training 5. Carbon Tax 11

12 Top Australian Commodity Exports 2010/11 Rank Commodity Value (A$Billion) Cumulative Value (A$Billion) 1 Iron Ore and Pellets Coal Gold Crude Oil Alumina/Aluminium Copper LNG Wheat Beef and Veal Nickel Source: ABARES: Australian Commodities December Quarter 2010: Forecast 12

13 Exports by Industry Sector Contribution to Export Value: % 4.1% 4.3% 20.7% Agriculture Other Services Mining Manufacturing 39.4% On a balance of payments basis, mineral resources accounted for 54.2% of exports of goods and services in Source: Australian Exports Fact Sheet, September 2010, ABARES Australian Commodities Statistical tables 13

14 Australian Mineral Export Markets Export Markets Export Markets Source: ABARES Australian Commodities Statistical Tables December Quarter 2010

15 Metals & Mining Sector Profile In excess of 600 Metals & Mining companies listed on the ASX Largest sector by number of companies and one third of all listings 400 new junior resource floats in the past five years 2nd largest sector by market capitalisation ~ $320 billion (23% of total) Was 10% of market capitalisation in late 1990s and early 2000s 15

16 16 Metals & Mining Sector Performance

17 Contents 1. Newcrest 2. Economy & Mining 3. Employment 4. Education &Training 5. Carbon Tax 17

18 Employment Growth 10-Year Employment Growth by Sector 18 Source: ABARES Australian Commodities December Quarters

19 Labour Demand By late 2010, planned capital expenditure in the minerals and energy sector had reached a record A$133 billion 72 advanced projects under construction or committed: 26 energy projects 25 minerals projects 15 related infrastructure projects 6 minerals processing projects 19 Source: ABARES

20 Labour Demand Pre-GFC peak minerals industry employment was 163,800 (Nov. 2008) November 2010, direct employment had rebounded to 187,200 Minerals jobs are forecast to increase by 61,500 over the next 5 years Allowing for departures and retirements, the minerals industry will require an additional 77,500 people by Source: National Resource Sector Employment Taskforce Report

21 Contents 1. Newcrest 2. Economy & Mining 3. Employment 4. Education &Training 5. Carbon Tax 21

22 Graduate Salary Comparison Sub-Sector Average Salary ($k p.a.) Accounting $52 Construction, Building, Architecture $61 Engineering $73 IT & Telecommunications $44 Marketing $43 Minerals Industry $80 22 Sources: McDonalds Gold and General Mining Industry Remuneration Report; MyCareer website

23 Education & Training Australia produced 211 mining engineering graduates in ,200 mining engineers will graduate over the next 5 years Forecast shortfall in mining engineers of 1,700 over this period Graduates Year 23

24 Apprenticeship Training Apprenticeship system introduced in Australia early in the 19 th century in response to demand for trades skills The number of apprentices generally increased throughout the 1970s and 1980s and peaked at 175,500 in 1989 Numbers fell during the early 1990s down to 111,200 in 1993 Between 1995 and 1999 apprentices in trade-related activities increased from 99,800 to 112,700 24

25 Minerals Industry Apprentices and Trainees In Training Commencements Completions 25 Source: NCVER Data *'Minerals is based on ANZSIC 2006, including mining division (ex oil and gas) plus basic ferrous and non-ferrous manufacturing.

26 Retention of Apprentices & Trainees Cancellations & Withdrawals as a % of Commencements Australia Total Minerals 26 Source: NCVER Data *'Minerals is based on ANZSIC 2006, including mining division (ex oil and gas) plus basic ferrous and non-ferrous manufacturing.

27 Training As the baby boomer generation moves towards retirement, Australia will experience a shortfall of workers aged It is predicted that workers aged 45 and over will provide up to 85% of workforce growth in the next decade. Employers will need to provide mature age employees with the necessary training to ensure they are able to maintain relevant skills and to up-skill in order to meet emerging skills requirements, Peter McMullin, the Chair of ACCI s EET Committee commenting on a recently released study titled It s Not About Age 27

28 Contents 1. Newcrest 2. Economy & Mining 3. Employment 4. Education & Training 5. Carbon Tax 28

29 Australia faces biggest GDP hit... Source: Harvard Climate Project 29

30 Stated actions and their impact China Copenhagen/Cancun offer would see emissions rise by 496 per cent by 2020 (on 1990 levels). India Copenhagen/Cancun offer would see emissions rise by 350 per cent by 2020 (on 1990 levels). Australia Copenhagen/Cancun offer would see emissions decrease by 4 per cent by 2020 (on 1990 levels). 30 International Energy Agency (2010) Non-OECD countries account for all projected growth in world emissions to 2020/2035.

31 International action has stalled United States at national level, cap and trade scheme rejected for 4 th time in 7 years. Regional schemes struggling. Canada no action (on cap and trade) until the US acts. Japan emissions trading scheme delayed till European Union for industry, most permits allocated even after Phase III of EU ETS in

32 The likely model... Fixed price ETS for 3 to 5 years, starting at $20-25, increasing by an annual accelerator (e.g. 4% + CPI). Floating carbon price thereafter target not set until 2014, 2015 or even as late as Other key features : generous household/motorist compensation arbitrary approach to trade exposed assistance electricity sector compensation minimal agriculture excluded a re-run of CPRS 32

33 The embedded flaw in the CPRS model CPRS model configured around compensation Under CPRS, households and motorists slated to receive $75B in compensation by 2020 while industry, the power sector and small business would receive $38Billion We need to shift from a revenue-dependency model 33

34 A tale of two schemes...tax burden. European Union ETS has raised A$2.9B in tax revenue since CPRS-style Australian scheme will raise more tax than EU scheme in its first 3 months. To date, EU ETS = per capita tax of A$0.96 p.a. In first year, Australian scheme = per capita tax of A$523. By 2020, Australian scheme projected to raise $150B in current $. 34

35 Competitiveness : EU vs AUS European Union ETS Australia CPRS EITE Coverage of industry sectors classified as trade exposed. % exports covered by trade competitiveness provisions. Coverage of manufacturing employment 164 sectors. 33 activities. 73 per cent per cent per cent 8 per cent Share of GDP 8 per cent 2 per cent 35 Source: SFS Economics

36 A better way... A firm s trade exposure must be a primary factor when assessing eligibility for transitional support. this approach is already used in the European Union. this approach recognises that export and import competing firms operating in competitive global markets cannot pass on the additional costs to their customers. The CPRS model fails to do this. 36