CORE Barclays Capital Inc and or one of its affiliates does and seeks to do business with companies covered in its research reports As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report Investors should consider this report as only a single factor in making their investment decision This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered qualified as research analysts with FINRA PLEASE SEE ANALYST CERTIFICATION S AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 80 Equity Research 21 February 2020 Restricted Internal Global Metals 2 run of mine concentration ahead of process plants and 3 hard rock rapid mine development Can you elaborate on these and the potential you see in cost cutting Coarse particle flotation and bulk ore sorting seems like the most obvious near term opportunities to implement do you agree What do you think could be the upside from these two technologies Growth in core divisions Focusing on the three core divisions are there any latest capacity low capital intensive growth options available in these to respond when if commodity markets improve Platinum Strong PGM prices have lifted profitability across the board But Amandelbult still appears to be the laggard in performance and it appears that the 550 koz target is unlikely to be achieved over the next couple of years can you provide an update on the progress to turn the asset around Is there not an opportunity to significantly reduce the footprint at Amandelbult to provide opportunities to expand Mogalakwena Can you discuss your latest thinking about expansion options in the context of demand growth market demand Diamonds Could management discuss the state of the diamond market and what the company is seeing with regards to prices demand Sentiment initially improved at the start of this year but uncertainty from the Covid 19 outbreak has clouded near term outlook Is 32 34mcts vs 30 7mcts plus inventory destocking an appropriate target for this year The Debswana master agreement whereby the government of Botswana currently takes 82 of all post tax FCF is due to expire within the next year what are the risks of the government further increasing taxes royalties given this happened at every previous renegotiation How much is capex expected to increase in the diamond business with the approval of Cut 9 at Jwaneng Cut 3 at Orapa and additional mining sampling vessels in Debmarine What is the likely timeline of approval of these projects Diamonds Lab grown diamonds are an increasingly debated topic with the production technology costs falling rapidly now cheaper to produce than natural diamonds and changing preferences of the young generation millennials While gem quality synthetic diamonds are only c 3 of global rough diamond supply it is estimated to be closer to 8 of the polished diamond market and growing is this something that is concerning for management In this regard management has spent c 180m of marketing spending in response to the weak markets in 2019 Is there a requirement to continuing to invest more in marketing Luxury goods companies typically spend up to 10 of revenues on marketing Is this something management will continue to do going forward Platinum Palladium and rhodium prices have rallied significantly over the past year Do you expect meaningful supply response as a result How quickly do you expect substitution into platinum to occur Does the recent price rally reduce the likelihood of further industry capacity cuts Can you provide details on the customer prepayment that was signed in H2 2016 balance now c 700m this is cash accumulating on Anglo Platinum s balance sheet as PGM prices increase so this balance appears likely to increase Barclays Global Metals might there also be a risk that increased pressure to deliver on operational targets could be resulting in more incidents Copper market Could you give us some context around what you are seeing with respect to the market and your customers in terms of end demand Covid 19 impact Antucoya The operation was commissioned in 2015 and reached commercial production levels at the end of Q1 16 With the operation now running at steady state costs have remained stubbornly high 200c lb in 2019 and 1 90 lb guidance for 2020 vs previously provided LT guidance of 160c lb and 80 85kt Cu prod What are the issues at the mine and timelines to fix this improve costs Esperanza commissioning ramp up started in 2011 is yet to consistently reach its expanded design capacity of 105ktpd it reached 111ktpd in Q4 18 but subsequent quarters 93ktpd there always appear to be issues that pop up can you discuss When do you expect to reach nameplate capacity Barclays Global Metals would you place credence on one over the other What is your view regarding effectiveness of the DLC structure Does this add value to shareholders in the long term in your view Oi