ANGLOAMERICAN(AAL.L)：MINASRIOANDAMPLATSIMPAIRMENTSIMPACTONP／BV1115

1、3600 3200 2800 2400 2000 deutsche bank markets research rating buy europe united kingdom company anglo american date 15 november 2012 company update metals although at the fy09 results amapa was impaired by us$1.5bn. our estimate is that the net carrying value on anglos balance sheet is us$8.35bn. u

2、sing a dcf based valuation, we think amapa is worth us$120m and minas rio is worth us$1.1bn. the difference between the carrying value of us$8.35bn and our npv of us$1.2bn leads us to think that on an impairment review, up to us$7.1bn of impairment is possible on these assets. to date, and with the

3、mine not yet in production, we think that management has been able to justify the valuation to its auditors. now that there is a change in ceo, it is more likely that an impairment will be made, in our view - new management is likely to take a more conservative view on problematic assets. amplats op

4、erational review as part of the ongoing operational review of amplats asset portfolio, we assume that amplats will focus on restructuring its rustenburg-based mines and the union mine. the rustenburg complex consists of five mines, and ten shafts, two of which are on care and maintenance already and

5、 two of which are brown-fields vertical shaft projects in ramp-up. the union complex consists of two mines (north and south) with three vertical shafts and three declines. in figure 5, we set out the fy11 refined platinum production, unit cost, operating margin and fcf of each of these mines. figure

6、 5: amplats key data by shaft, production, unit costs, capex, ebitda, fcf, fy11 (fcf=ebitda-capex) shaftsstatusrefined ptunit costsib capex project capexebitdaebit marginfcf production 000kozr/pt ozrmrm%rm refined rustenburg mines bathopele khomanani 1 1 operating operating 118 102 12,522 14,930 193

7、 185 153 20 857 441 24511 236 12 2operating thembelani1operating10614,054864476061973 2on hold khuseleka1operating13315,17812721057713240 2ramp-up siphumelele1operating10112,8371444361020423 union mines 2 3 c thus after a potential unbundling of amplats and kumba and assuming no unlock of value, ang

8、lo would be worth us$16.3bn. figure 9: anglo american and anglo american rump value from mar 04 (us$m) figure 10: anglo american and anglo american rump value from jan 10 (us$m) 100000 80000 60000 40000 20000 0 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 80000 60000 40000 20000 0 60% 50% 40% 30% 20% 10%

9、0% anglo listedsanglo rump valuerump as a % of angloanglo listedsanglo rump valuerump as a % of anglo source: deutsche bank, datastreamsource: deutsche bank, datastream another way of looking at the rump is to back out the value and earnings of the listed subsidiaries and to compare the anglo and ru

10、mp pes. the charts below are based on ibes consensus earnings and are prepared for f1 and f2 pes. on the basis of f1 pe, anglo is trading at 12.9x while the rump is on 9.3x, a 28% discount. on the basis of f2 pe, anglo is trading at 10.1x while the rump is on 7.1x, a 29% discount. figure 11: anglo a

11、merican and anglo american rump pe, based on ibes consensus, f1 35 30 25 20 15 10 5 0 figure 12: anglo american and anglo american rump pe, based on ibes consensus, f2 25 20 15 10 5 0 anglo rump pe fy1anglo pe fy1 anglo rump pe fy2anglo pe fy2 source: deutsche bank, datastream deutsche bank ag/londo

12、n source: deutsche bank, datastream page 9 15 november 2012 metals the recovery of grade and the mill at collahuasi as well as the stripping at los bronces to improved flexibility should deliver growth over the next year. second, the minas rio project continues to be plagued by delays and we have pu

13、shed out first production to 2q15 and the capex budget to us$6.9bn. thirdly, the market is anticipating initial news at the final results from the amplats operational review, which is currently underway, we expect the review to herald a major change in the way that amplats fits into anglo (as a smal

14、ler and lower cost solution). we think that on balance the amplats review is most positive. given the upside potential based on our valuation we rate anglo as a buy. valuation our price target reflects a valuation taking into consideration both dcf over life-of-mine (9.5% wacc - beta 1.25, erp 4.5%,

15、 rf 5%, cod 6% on a through-the-cycle target gearing of 30%) for core asset valuations and market values or peer group multiples for non-core assets. we value at 1x npv in line with its long-term average and what we believe is the markets unwillingness to pay for more than approved growth. risks ris

16、ks to our view include stronger-than-expected operating currencies (rand, a$) and lower commodity prices, in particular pgms, copper and iron ore. more specific risks include potential cost increases at minas rio, the platinum operational review failing to reach expectations and delays to project ap

17、provals. page 10deutsche bank ag/london 15 november 2012 metals as a result, the recommendations may differ and the price targets and estimates of each may vary widely. in august 2009, deutsche bank instituted a new policy whereby analysts may choose not to set or maintain a target price of certain

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