摩根士丹利-铂族金属新供应激励：现货价格充足支撑多数潜在项目-Incentivising new supply-20261007

RMBIOMrganstanley

October7,202611:01PMGMT

IDEA

SARocks|Europe

lncentivisingnewsupply

SpotPGMpricesarehighenoughtojustifythemajorityofpotentialprojects.

Exhibit1:Weestimatethatcurrentpricesarehighenoughtoprovideareturnon60%ofthePGMprojectsinourdatabase

Incentiveprice(US$/4Eoz)

Standardisedto58%Pt,30%Pd,10%Rh,2%Au

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Ph1&2)

Chalice

SandslootUnderground

K4

StyldriftII

SiphumelelePhase2

Kopanengextension

Bokoni

MarikanaE3extension

Twickenham

Bengwenyama–Stages1+2

Platreef(Ph1+2)

SouthCluster

MarikanaE4

Portal10(SouthPit)

Darwendale

Karo

Bravo

17shaft

RussianPlatinum(Chernogorskoye

Gonneville-

Waterberg

Incentivepricecostcurve–potentialPGMsupply(US$/4Eoz,real)

01,0002,0003,0004,0005,0006,0007,0008,000

Cumulativeproduction(koz4Epa)

IncentivepriceSpotbasketLTrealbasketSource:Companydata,MorganStanleyResearchestimates

Overall,we'refindingcurrentpricesarehighenoughtojustify60%ofthenearly8Mozofannualproductionthe20projectsinourdatabasecouldproduce.Ifspotpriceshold,we'reexpectingmoreandmoreoftheseprojectstobeapproved.

Asourcommodityteamwritesinthisnote(link),we'veliftedthelong-termpricesweuseinourmodels.Thenetresultisanincreaseinour4ebasketpricetocR40k/oz.Werecentlywroteaboutthetrendwe'veseenamongstPGMproducersofrisinglong-termpricedecks,here.MostrecentlyImpalahaslifteditslong-termprice

assumptionsby⅓,yetremainsbelowspotwithrhodium,palladiumwellbelow

spot,andplatinumabove.Northam'slong-termpriceismuchhigher,atR49k/oz.Thecompany'sapproachistoforecastthelong-termcostcurve(saymid-2030s),

includinggeologicalinflationanddepletion,andthenusethepricethatwouldallowaproducerinthemiddleofthecurvetobefreecashflowpositive.Welikethe

conceptoftheapproach,butwelackconfidenceinourabilitytomodelvolumes/grades/costsin10years'time.

Weprimarilyuseprojectincentivepricestoset(oratleastsanitycheck)our

long-termprices,inconjunctionwithlong-runindustrymarginsandindustrycost/margincurves.Therearesignificantflawsineachcase.Forincentiveprices,theleadtimefornewprojectswayexceedsthepointatwhichweseeourlong-termprices.Furthermore,inourexperience,miningcompaniesrarelywaitforincentivepricestoberealisedbeforetriggeringprojectsduetotheselongleadtimes,butratherinvestonthebasisofexpectationsofpricesbeinghighenoughtoincentiviseprojects.

Ourprojectincentivepipelineconsistsof20discreteprojectsthatwe'reaware

RMBMoRGANSTANLEyPRopRiETARyLimiTED+BrianMorgan

EquityAnalyst

Brian.Morgan3@

+2711587-0803

ChristopherNicholson

EquityStrategistandAnalyst

Christopher.Nicholson@

+2711587-0816

EEMEA-MEtals&MiNiNg

Europe

IndustryViewIn-Line

SAGold:Favouredcommodity,buythelaggards(7Oct2026)

metal&ROCK:Long-termIncentivePrices:

DevelopmentCostsRising(6Oct2026)

Metals&Mining:4Q26-FollowtheCash(6Oct2026)

SAPGMs:Capandcollar(6Oct2026)

SADiversifiedMining:Capexcatch-up(6Oct2026)

metal&ROCK:ThePriceDeck–4Q26:SelectiveOptimism(6Oct2026)

RMBMorganStanleyEconomics&Equities:BigFive&OffPisteConferenceFeedback2026(29Sep2026)

Paper&Packaging:Muchhealthier(11Sep2026)

SasolLtd:Macros,managementandmoat(7Sep2026)

NorthamPlatinumLimited:Unsolicitedapproach(25Aug2026)

GoldFieldsLimited:Chartingtheinvestmentcase(20Aug2026)

ThungelaResourcesLtd:SideFX(19Aug2026)

RMBMorganStanleyisamemberoftheJSELimitedandA2X(Pty)Ltd.

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

2

RMBIOMrganstanleyIdea

of.Thereareotherprojects,butwethinkthislistprovidesaverycomprehensive

weightedviewoftheinvestmentdecisionsfacedbymanagementteamsofPGM

companies.Inourworkingswebeginwithfeasibilitystudyparameters,totheextentthey'vebeenprovidedbymanagement,andthenapplyourownjudgementtoflextheseparameters,basedonourexperienceoftheindustry.Inotherinstanceswe

benchmarkbasedonsimilarprojects.Wenormalisetheincentivepricingtoreflecta58%Pt,30%Pd,10%Rhand2%Auprillwithby-productslikenickelbasedonourlong-termnickelincentivepricesoffsetagainstcosts.Thisresultsinpalladium

dominantprojectsshiftingtotherightofourcurve.

RMBIOMrganstanleyIDEA

Comparatives

Exhibit2:SpotbasedcompsofSAlistedresourcesstocks

Spotup/(down)sideto

Rating

Lastclose

(R/s)

%up/

(down)

sidetoPT

Spotmetrics(2027)

FCFy

consensusEPS

LTMTSR

30dshare

priceperf.

30dADV

($m)

P/E

EV/EBITDA

FY26

FY27

DiversifiedMining

AngloAmerican

ARM

BHP

Exxaro

GlencoreKumba

South32

Thungela

++

EW

OW

OW

OW

EW

OW

UW

910.90

156.50

715.00

174.00

125.88

221.54

56.95

122.77

NM

28%

10%

26%

31%

4%

6%

-43%

28.8x

9.6x

16.1x

4.2x

9.1x

9.1x

14.3x

5.1x

8.9x

4.6x

7.7x

3.4x

6.1x

3.7x

5.0x

2.1x

2%

-4%

6%

12%

13%

4%

10%

14%

-23%

5%

4%

-20%

-29%

-19%

-40%

-3%

16%

26%

2%

1%

-11%

40%

-13%

54%

11%

58%

-25%

78%

51%

>50

4

>50

11

>50

6

>50

5

PGMs

ImplatsNorthamSibanye

Valterra

OW

EW

EW

EW

187.50

249.45

41.15

1,271.05

28%

24%

17%

1%

6.4x

7.7x

4.4x

9.8x

3.4x

5.0x

3.6x

5.7x

15%

7%

12%

8%

3%

9%

-5%

2%

-33%

-2%

-7%

-5%

-10%

16%

48

40

>50

>50

Gold

AngloGoldGoldFields

Harmony

EW

OW

OW

1,536.95

594.61

281.39

6%

16%

17%

11.7x

8.8x

6.7x

5.9x

4.7x

3.9x

8%

9%

8%

-3%

-7%

-21%

-24%

-20%

25%

-14%

-11%

>50

>50

>50

Non-miningresources

Mondi

Sappi

Sasol

EW

EW

EW

174.25

13.11

235.99

3%

30%

-24%

16.0x

NM

3.2x

8.8x

27.0x

2.5x

-3%

-46%

28%

19%

NM

23%

-73%

38%

-13%

-37%

121%

26

2

>50

Source:MorganStanleyResearchestimates.++StockRating,PriceTarget,orEstimatesforthiscompanyhavebeenremovedfromconsiderationinthisreportbecause,underapplicablelawand/orMorganStanleypolicy,MorganStanleymaybeprecludedfromissuingsuchinformationwithrespecttothiscompanyatthistime.Note:Pricedatcloseon6October2026;NM=notmeaningful.

RMB|MoRGANSTANLEy3

4

RMBIOMrganstanleyIDEA

PerformanceScorecard

Exhibit3:Last12months(LTM)totalreturns:majorMetals&Miningequities

LTMTotalReturns:MajorMetalsandMiningcompanies

80%

68%63%

63%

46%

44%

32%

28%

27%

20%

9%

0%10%20%30%40%50%60%70%80%90%

Freeport-McMoRanArcelorMittal

BHPBillitonLimitedGlencore

AngloAmerican

RioTintoPlc

NewmontMiningAlcoaCorpVale

BarrickMiningZijinMining

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD

Exhibit5:Last12months(LTM)totalreturns:copperequities

LTMTotalReturns:CopperEquities

36%

127%99%

90%

86%80%

76%

73%

72%

64%

63%

60%

55%

41%

38%

32%

27%

26%

24%

19%

-10%

-23%

LMECopperKurotani

MitsuiMiningAndSmelting

SumitomoMetalMiningKGHM

Freeport-McmoranGrupoMexico

MitsubishiMaterialsHudbayMineralsSouthernCopper LundinMiningDowaHoldings

SandfireResourcesAntofagastaAurubis

EntréeGoldJiangxiCopperBoliden

FirstQuantumMineralsChinalco

ChinaNon-ferrousIvanhoeMines

-40%-20%0%20%40%60%80%100%120%140%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Exhibit4:Last12months(LTM)totalreturns:general&miningindices

LTMTotalReturns:General&MiningIndices

49%44%

35%27%

18%

43%17%

16%

11%

-1%

-3%

DSSteelIndex

STOXXEU600BasicResMSCIWorldM&MFTSE350Mining

NYSEARCAGoldBugsBOVESPA

TSXCompositeS&P500

FTSE100

JSEAll-ShareASX200

-10%0%10%20%30%40%50%60%

Source:Datastream,MorganStanleyResearch

Exhibit6:Last12months(LTM)totalreturns:goldequities

LTMTotalReturns:GoldEquities

LBMAGold CenterraDowaHoldings

BuenaventuraPanAfricanResources(GBP)

NewmontMiningEndeavourMining RegisResources EldoradoGoldAnglogoldAshanti NewGold EvolutionMining BarrickMiningRoyalGold

Franco-NevadaAgnico-EagleMinesZijinMining

ZhongjinGoldCorpLtd ResoluteMiningNorthernStarResourcesAlamosGold

KinrossGold

S.A.M.C.(Ma'aden)

HarmonyGoldMiningGoldFields

Drdgold

ShandongGoldMiningCoLtdZhaojinMiningMedusaMining

-100%

.5%

88%

60%

33%

32%

32%

32%

31%

29%

24%

24%

23%

20%

15%

10%m9%m9%8%6%

4%

-6%-6%-6%

-7%m -13%-17%

-26%

-47%

-48%

-50%0%50%100%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

RMB|MoRGANSTANLEy5

RMBIOMrganstanleyIDEA

Exhibit7:Last12months(LTM)totalreturns:silverequities

LTMTotalReturns:SilverEquities

26%

46%37%

35%

24%17%

15%

15%

11%

11%

-5%

-11%

LBMASilver

SilverStandardFirstMajesticSilver

HochschildMining FortunaSilverMinesIndustriasPenolesSABdeCVPanAmericanSilver

FresnilloPlcAmericasSilverCorporationEndeavourSilver

ExcellonResources

CoeurMining

-20%0%20%40%60%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Exhibit9:Last12months(LTM)totalreturns:aluminiumequities

LTMTotalReturns:AluminiumEquities

South32LtdNationalAluminium

ShandongNanshanAluminiumUACJCorp

CenturyAluminum

HindalcoIndustries

AluminiumBahrain

UnitedCompanyRusal-36%

15%

68%

43%

40%

33%

30%

29%

28%

28%

23%

12%

-5%m

-5%m-21%

93%

-50%0%50%100%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Exhibit8:Last12months(LTM)totalreturns:ironoreequities

IronOre(62%FeNorthChina)-6%

BHPBillitonLimited63%

RioTintoPlc44%

MinRes36%

CAP2%

Cliffs-3%

Fortescue-7%

NMDCLtd-9%

KumbaIronOre-27%

ChampionIron-35%

FerrexpoPlc-36%

ZanagaIronOre-61%

-80%-60%-40%-20%0%20%40%60%80%

LTMTotalReturns:IronOreEquities

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Exhibit10:Last12months(LTM)totalreturns:cokingcoalequities

LTMTotalReturns:CokingCoalEquities

CokingCoal(AustraliaFOB)43%SuncokeEnergy

AlphaMetallurgicalResources5%

BanpuPublicCompany3%

(Persero)PtAnekaTambang0%

ArchCoal,Inc.0%

SouthGobi-17%

PeabodyEnergy-18%

HidiliIndustryInt'l-58%

-80%-60%-40%-20%0%20%40%60%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

6

RMBIOMrganstanleyIDEA

Exhibit11:Last12months(LTM)totalreturns:thermalcoalequities

LTMTotalReturns:ThermalCoalEquities

NewcastleThermalCoal38%

NewHope72%

AdaroEnergy52%

BukitResources41%

ShaanxiCoal39%

YangquanCoalmm31%

WhitehavenCoalmm22%

YancoalAustralia20%

ChinaShenhuaEnergymm16%

PtBumiResources13%

IndoTambangrayaMegah12%

YanzhouCoalMining11%

ChinaCoalEnergy10%

ConsolEnergyInc.2%

ShougangFushan2%

CoalIndia1%

ArchCoal,Inc.i0%

PTABMInvestama-9%

SouthGobi-17%

PeabodyEnergy-18%

HarumEnergy-27%

MongolianMining-33%

QinfaGroup-40%

HidiliIndustryInt'l-58%

-80%-60%-40%-20%0%20%40%60%80%

Exhibit12:Last12months(LTM)totalreturns:otherMetals&Miningequities

LTMTotalReturns:Platinum,Diamonds,RareEarthsEquities

IlukaResources-17%

KenmareResources-32%

BefesaSA17%

ValterraPlatinum15%

NorthamPlatinum-4%

SibanyeStillwater-10%

ImpalaPlatinum-10%

Easplats-11%

-80%-60%-40%-20%0%20%40%60%

36%

34%17%

11%-4%

-19%

-24%

MineralResourcesLimitedMerafeResourcesBefesaSA

PaladinEnergy

ChinaMolybdenumOmHoldingsEramet

SyrahResources-73%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Exhibit13:Last12months(LTM)totalreturns:steelequities

LTMTotalReturns:Steel

NucorCorporationSteelDynamics

ArcelorMittalSAGerdauS.A.

TerniumS.A. BlueScopeSteel SSABABDongkukSteelMill

thyssenkruppAGSalzgitterAG

voestalpineAG

YamatoKogyoPOSCO

KobeSteelCommercialMetalsCompany

TokyoSteelNipponSteel&SumitomoMetal

GrupoSimecS.A.B.deC.V.SchnitzerSteelIndustriesJSWSteelLtd.

USSteelCorporationIndustriasCH,S.A.B,deC.V.

TataSteelCleveland-CliffsInc HyundaiSteelJindalSteel&Power JFEHoldingsBaoshanIron&Steel

ArcelorMittalSouthAfricaLimitedCSN

MaanshanIron&SteelAngangSteelCompanyLimited

-54%

69%

68%

63%

61%

56%

mm53%

mm45%

43%

42%

mm31%

30%

mm23%

12%

mm11%

10%

.4%

2%

I1%

I0%

0%

0%

-1%

-3%

-4%

-5%m

-7%

-9%

-16%

-23%

-42%

86%

-100%-50%0%50%100%

Exhibit14:Last12months(LTM)totalreturns:stainlesssteelequities

LTMTotalReturns:StainlessSteelEquities

Acerinox

41%

Aperam

Outokumpu

25%

11%

0%5%10%15%20%25%30%35%40%45%

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

Source:ThomsonReuters,MorganStanleyResearch.ReturnsinUSD.

RMB|MoRGANSTANLEy7

RMBIOMrganstanleyIDEA

Mining–Relativeperformance&valuation

Exhibit15:WorldDatastreamMiningindexRoErelativetotheDatastreamWorldIndex

WorldDatastreamMiningindexRoErelativetotheDatastream

2.5

2.0

WorldIndex

——MiningRelativeRoEAverage

1.5

1.0

0.5

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

0.0

Source:Datastream,MorganStanleyResearch

Exhibit17:WorldDatastreamMiningindextrailingP/ErelativetotheDatastreamWorldIndex

WorldDatastreamMiningindextrailingP/Erelativetothe

DatastreamWorldIndex

MiningRelateivePEtrailingAverage

3.0

2.5

2.0

1.5

1.0

0.5

0.0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

Source:Datastream,MorganStanleyResearch

Exhibit19:WorldDatastreamMiningindex12mforwardDYrelativetotheDatastreamWorldIndex

WorldDatastreamMiningindex12mforwardDYrelativetothe

DatastreamWorldIndex

MiningRelativePYforwardAverage

16

14

12

10

8

6

4

2

0

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Source:Datastream,MorganStanleyResearch

Exhibit16:WorldDatastreamMiningindexP/BrelativetotheDatastreamWorldIndex

WorldDatastreamMiningindexP/BrelativetotheDatastream

WorldIndex

MiningRelativeP/BAverage

2.5

2.0

1.5

1.0

0.5

0.0

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Source:Datastream,MorganStanleyResearch

Exhibit18:WorldDatastreamMiningindex12mforwardP/ErelativetotheDatastreamWorldIndex

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

WorldDatastreamMiningindex12mforwardP/Erelativetothe

DatastreamWorldIndex

——MiningRelativePEforward--Average

Source:Datastream,MorganStanleyResearch

Exhibit20:WorldDatastreamMiningindexsharepricerelativetotheDatastreamWorldIndex

WorldDatastreamMiningindexsharepricerelativetothe

250

DatastreamWorldIndex

——MiningvsMarketindexedshareprice

200

150

MiningvsMarketAverageindexedshareprice

100

50

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

0

Source:Datastream,MorganStanleyResearch

8

RMBIOMrganstanleyIDEA

Steel–Relativeperformance&valuation

Exhibit21:WorldDatastreamSteelindexRoErelativetotheDatastreamWorldIndex

WorldDatastreamSteelindexRoErelativetotheDatastream

WorldIndex

2.0

——SteelRelativeRoE--Average

1.5

1.0

0.5

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

0.0

Source:Datastream,MorganStanleyResearch

Exhibit23:WorldDatastreamSteelindextrailingP/ErelativetotheDatastreamWorldIndex

WorldDatastreamSteelindextrailingP/Erelativetothe

12.0

DatastreamWorldIndex

10.0

8.0

——SteelRelativePETrailing

6.0

--Average

4.0

2.0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

0.0

Source:Datastream,MorganStanleyResearch

Exhibit25:WorldDatastreamSteelindex12mforwardDYrelativetotheDatastreamWorldIndex

WorldDatastreamSteelindex12mforwardDYrelativetothe

DatastreamWorldIndex

SteelRelative12MForwardDYAverage

5

4

3

2

1

0

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Source:Datastream,MorganStanleyResearch

Exhibit22:WorldDatastreamSteelindexP/BrelativetotheDatastreamWorldIndex

WorldIndex

SteelRelativePBAverage

WorldDatastreamSteelindexP/BrelativetotheDatastream

1.5

1.0

0.5

0.0

2.5

2.0

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Source:Datastream,MorganStanleyResearch

Exhibit24:WorldDatastreamSteelindex12mforwardP/ErelativetotheDatastreamWorldIndex

WorldDatastreamSteelindex12mforwardP/Erelativetothe

2.5

DatastreamWorldIndex

——SteelRelativePEForward--Average

2.0

1.5

1.0

0.5

0.0

Source:Datastream,MorganStanleyResearch

Exhibit26:WorldDatastreamSteelindexsharepricerelativetotheDatastreamWorldIndex

WorldDatastreamSteelindexsharepricerelativetothe

250

DatastreamWorldIndex

——SteelvsMarketindexedshareprice

200

150

SteelvsMarketAverageindexedshareprice

100

50

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

0

Source:Datastream,MorganStanleyResearch

RMB|MoRGANSTANLEy9

RMBIOMrganstanleyIDEA

Mining&SteelEquities–Financials

Exhibit27:EBITDAmarginsofkeyminingcompaniesonourpricedeck

32%31%31%32%

23%

47%42%

38%35%

39%

35%35%35%

SectorAverageEBITDAMargin

39%36%

42%

37%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026e

2027e

Source:Companydata,MorganStanleyResearchestimates(e).DatarepresentAngloAmerican,

Antofagasta,Glencore,RioTinto,SouthernCopper,FortescueMetalsGroup,LundinMining,South32,Freeport-McMoRan,TeckResources,Boliden,FirstQuantum,Befesa,NorskHydro,BHP,Vale

Exhibit29:SectoraggregateFCFEvs.dividendsforkeyminingcompaniesonourpricedeck

US$mn

SectorAggregateFCFEvsDividends

FCFEDividends

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026e

2027e

Source:Companydata,MorganStanleyResearchestimates(e).DatarepresentAngloAmerican,

Antofagasta,Glencore,RioTinto,SouthernCopper,FortescueMetalsGroup,LundinMining,South32,Freeport-McMoRan,TeckResources,Boliden,FirstQuantum,Befesa,NorskHydro,BHP,Vale

Exhibit31:P/Bvs.ROEforkeyminingcompaniesonourpricedeck

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026e

2027e

SectorAverageP/BvsROE

3.5

P/B(LHS)BaseCaseROE(RHS)

3.0

2.5

2.0

1.5

1.0

0.5

0.0

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Exhibit28:Aggregatecapitalexpenditureatkeyminingcompanies

US$bn

44

2727

AggregateCapexofMajorMiners

3736

31

44

41

49

47

70

71

63

56

56

57

58

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026e

2027e

Source:Companydata,MorganStanleyResearchestimates(e).DatarepresentAngloAmerican,

Antofagasta,Glencore,RioTinto,SouthernCopper,FortescueMetalsGroup,LundinMining,South32,Freeport-McMoRan,TeckResources,Boliden,FirstQuantum,Befesa,NorskHydro,BHP,Vale

Exhibit30:Financialleverage:netdebt/equityforkeyminingcompaniesonourpricedeck

SectorAggregateND/E

1.20

1.1

1.00

0.8

0.80

0.6

0.600.5

0.4

0.40.40.4

0.400.30.30.30.30.30.30.30.30.3

0.20

0.00

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026e

2027e

Source:Companydata,MorganStanleyResearchestimates(e).DatarepresentAngloAmerican,

Antofagasta,Glencore,RioTinto,SouthernCopper,FortescueMetalsGroup,LundinMining,South32,Freeport-McMoRan,TeckResources,Boliden,FirstQuantum,Befesa,NorskHydro,BHP,Vale

Exhibit32:P/Bvs.ROE:Datastreamglobalmining

GlobalMining:T