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Natural Fuel Limited
Extraordinary General Meeting 5 June 2008
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Overview: Natural Fuel Ltd
Natural Fuel Limited (NFL) is an Australian renewable energy company which listed on the Australian Stock Exchange in 2006.
Aims to be a leading global player in the supply of biodiesel and kosher grade glycerine
Owns the world’s largest biodiesel and glycerine production facility in Singapore
50% owner of Australia’s largest biodiesel and glycerine production facility in Darwin
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NFL Directors and Management
• Richard Selwood Non Executive Chairman
• Michael Pixley Deputy CEO
• Mathew Whyte Company Secretary & Chief Financial Officer
• Martin Kirwan Non Executive Director
• Michael Coote Non Executive Director
• Robert Rooke Non Executive Director
• Noel Winzer Non Executive Director
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Singapore Operations
• Owned and operated by Natural Fuel Singapore Pte Ltd
• Located on Jurong Island
• Capacity of 600,000mta biodiesel and 60,000mta glycerine
• Independent glycerine refining capabilities
• Capable of using multiple feedstock blendsFor
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Singapore Facility
Hub for global fuel market
Tax free for 10+ years
Capacity for plant expansion
Good access to feedstock
Good access to Asia and US Markets
Train 1 Train 2 Train 3
Glycerine 1 Biodiesel 1 Glycerine 2 Biodiesel 2 Glycerine 3 Biodiesel 3
20,000mta 200,000mta 20,000mta 200,000mta 20,000mta 200,000mta
Current Production Capacity at Singapore
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Darwin Operations
• Owned and operated by Natural Fuels Australia Ltd (NFAL) - a 50/50 Joint Venture between Babcock & Brown Environmental Investments and NFL
• Capacity of 122,500 mta biodiesel and 12,000 mta refined glycerine
• Independent glycerine refining capabilities
• Capable of using multiple feedstock blends
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Asset Utilisation Strategy
Production of Refined Glycerine
Maximum utilisation of glycerine refining capabilities to generate revenues by processing external crude glycerine into refined, kosher-grade glycerine (Glycerine Mode)
Source Alternative Feedstocks
Continue to focus on long-term feedstock contracts and fast track access to lower cost alternative feedstocks such as jatropha
Cost Reductions
Reduce fixed costs at Darwin and Singapore to align with Glycerine Mode operations and reduce overhead costs at corporate levels
To meet the current market challenges, NFL is implementing specific plans to maximiseutilisation of its assets, mitigate market risks and provide the foundation for future growth:
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‘Glycerine Mode’ Operations
A significant competitive advantage is NFL’s ability to optimise plant operations from full biodiesel production to full refined glycerine production depending on feedstock prices
‘Glycerine Mode’Imported Crude
Glycerine
Biodiesel Production Glycerine Refining
‘Biodiesel Mode’Feedstocks
Biodiesel RefinedGlycerineF
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Partnership with GEM Biofuels
• GEM Biofuels is
AIM-listed biodiesel feedstock company
Focused on Jatropha plantations in Madagascar
• Initial 10 year supply agreement signed with NFL
5 yrs fixed price of US$500 per metric tonne Jatropha
2009 = 2.5% of Singapore feedstock requirements
2013 = 25% of Singapore requirements (up to 50%)
• NFL holds a 3.9% interest in GEM
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Jatropha as a Key Feedstock
• Inexpensive - high yields, grows on arid land
• Produces high quality biodiesel with superior cold flow properties
• No impact on ‘food’ market - not a food stuff
• Local species = reduced risk of crop failure
• Long economic life - 35-40 year productive life
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Singapore
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Singapore
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Proposals
1. The Power Knight Proposal
2. Two additional matters:
The issue of the Tropical Oils Options to Tropical Oils
The conversion of the outstanding balance of the Working Capital Loan from Ganesha into Shares
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The Power Knight Proposal
The Power Knight Proposal comprises:
• Part 1 - The issue of Shares to Power Knight to raise US$20M
Placement of 168,764,978 Shares for a total issue price of US$20M, equivalent to A$0.13 per Share (as at 25 March 2008)
• Part 2 - A Project Finance Loan of US$20M advanced in two portions:
Tranche 1 = US$6 million drawndown 24 April 2008
Tranche 2 = US$14 million drawndown 29 May 2008
• A right for Power Knight to convert the outstanding principal amount of the Project Finance Loan into Shares
Placement of up to a further 168,764,978 SharesFor
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About Power Knight
• Power Knight is an associated company of PT Risjadson Holding & Investment Co - a privately owned company based in Jakarta, Indonesia
• Risjadson, controlled by the Risjad family, is focused on energy, mining and plantation sectors in Indonesia
• The Risjad family is committed to green energy development through renewable fuel crop production such as Jatropha
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The Risjadson Group
• The Risjad family’s pilot program includes an established jatropha plantation of more than 200ha, which is currently generating fuel for equipment and haulage trucks for the family’s coal mining operations in Indonesia.
• The Risjad family anticipates that the alliance with NFL will offer it theopportunity for significant expansion of its jatropha production and refining capacity.F
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Risjadson Group Overview
Risjadson Group
Energy & Mining Resources Agro-Industries & Plantation Resources
Mining
Services Non-Core Portfolio
PlantationsThermal Coal Direct/IndirectNickel IndirectChromium IndirectGold IndirectBauxite Indirect
Contracting IndirectEPC IndirectIPP IndirectTrading DirectMaritime & Logistics Indirect
Petrochemical IndirectChemical Direct/IndirectManufacturing & Consumer Direct/Portfolio
CPO Direct/PortfolioRubber Indirect/PortfolioChromium Indirect/PortfolioGold Indirect/PortfolioBauxite Direct
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Key Outcomes if the Proposal is Passed
• Increased cash resources which will allow continuation of NFL’s ‘Asset Utilisation Strategy’
• A new strategic partner in Power Knight – feedstock supply and biodiesel offtake
• Power Knight could own up to 49.98% of NFL
• Dilution of Shares – up to 675,342,083 Shares on issue
• Power Knight will elect three members to NFL board
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Additional Matters
• Tropical Oils OptionsSubject to passing of Power Knight Proposal
Power Knight Proposal was facilitated by Tropical Oils
In recognition NFL agrees to issue Tropical Oils with 12M options exercisable at A$0.13 per Share within 3 years from this EGM
• Conversion of Working Capital Loan from GaneshaNFL may exercise an option to convert all or part of the balance of the loan into Shares at an issue price of A$0.13
The Company’s current intention is to convert 60% of the balance into 20,769,231 Shares
Subject to shareholder approval
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