060907 Mn Alloys Presentation Sept 06 v3 - BHP Billiton · PDF filefavouring the BF route. Low per capita steel ... Socio-political factors Other Raw Materials 14% ... Durban.. +-7

BHP Billiton

Affival Nordic Cored Wire & Alloy Market Seminar

7 September 2006

Page 2

Manganese End Use MarketsManganese End Use Markets

Manganese Alloy IndustryManganese Alloy Industry

Manganese Ore IndustryManganese Ore Industry

Manganese Industry Overview

Crude SteelCrude Steel

BHP Billiton ManganeseBHP Billiton Manganese

Manganese Value System OverviewManganese Value System Overview

But First, a Little About BHP Billiton

Page 4

Structure driven by customer needsPetroleum

Aluminium

Base Metals

Carbon Steel Materials Diamonds & Spec Prod Energy Coal Stainless Steel Materials

Page 5

Strategic drivers

“Our core purpose is to create long-term value through the discovery, development and conversion of natural resources, and the provision of innovative customer and market-focused solutions.”

World Class Assets

The BHP Billiton Way(Value Added Processes)

People

‘Licence to Operate’

Financial Strength and Discipline

Project Pipeline

Growth Options

Page 6

As at 30 June 2006Size of bubble indicates proposed capital expenditure; bold outer border signifies sanctioned project..

$US 200M$US 200M

Deep inventory of growth projectsBROWNFIELD

GREENFIELD

Blackwater CPP

NeptuneNeptune

NWS T5NWS T5

StybarrowStybarrow

NWSAngelNWSAngel

Koala UGKoala UG

ZamzamaPhase 2

AtlantisNorth

Douglas –MiddelburgDouglas –

Middelburg

SpenceSpence

2009CY2007 2008 2010

AlumarAlumar

SamarcoSamarco

NickelPetroleumDiamonds

Energy CoalAlumina

Iron OreBase Metals

Met. CoalMn Ore

WA Iron OreRGP 4+

WA Iron OreRGP 4+

PyreneesPyrenees

BMA Phase 2

YabuluYabulu

WA Iron OreRGP 3

WA Iron OreRGP 3

RavensthorpeRavensthorpeAtlantis SouthAtlantis South

Worsley E&GWorsley E&G

MaruwaiMaruwai

GEMCO

ShenziShenzi


Page 8








Page 9

The Manganese Value Chain• Mining

– Crushing and screening – (sizing, lumpy and fines)

– Dense Media Separation – (mineral from gangue)

– Sintering – (increase Mn unit value per ton)

– Reductive smelting (alloying) & casting – increase Mn unit value per ton further)

• Any one or more of these steps may be bypassed if the grade is high enough

• Logistics

Page 10








Page 11

Manganese End Use Markets

OreProducers

94%

6%

BulkAlloyingCapacity

SpecialtyProcessing

Crude Steel

Chemical and other uses of Mn metal

End Use Purpose

Source: Roskil l

Page 12

Effect of Mn on Steel Product Properties

Use of Manganese in steel results in increased:• Strength• Hardness• Toughness/impact resistance• Wear resistance (e.g. rail steels)• Machinability• Ability to be heat treated for superior strength and hardness

Page 13








Page 14

Global Steel Production Continues in New Golden AgeNew age of steel firmly established, parallels between post 1945 and post 1995

industrialization of China.

0

200

400

600

800

1000

1200

1920 1930 1940 1950 1960 1970 1980 1990 2000

The golden age

1945 – 1973 6.2%pa

Oil Shocks

Fall of Berlin Wall

The efficiency age

1974 – 1995 0.2%pa

The China age.

Followed by BRICS.

The emerging age

pre 1945 2.8%pa

New golden age

Source IISI, BHP Billiton

Millio

n Ton

nes

Page 15

Chinese Steel Import / Export

Data source: CMMA, BHP Billiton calculations

China Steel Imports and Exports

-1,000

0

1,000

2,000

3,000

4,000

5,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Kt

Net Flat Imports

Net Long ImportsNet Pipe Imports

Net Finished ImportsExports

Imports

Exports

Page 16

Steel and Raw Material Impact of Non-China Growth

New steel capacity plannedLarge importer (50Mtpa)Strong demand growthImported iron oreDomestic met coal

New steel capacity plannedLarge importer (50Mtpa)Strong demand growthImported iron oreDomestic met coal

SE Asia

Low cost steel producerMajor steel exporterDomestic steel demand increasingDomestic iron oreDomestic met coal

Low cost steel producerMajor steel exporterDomestic steel demand increasingDomestic iron oreDomestic met coal

Russia

Low steel per capita – 35kg50+ Mt capacity plannedConstruction/automotive/consumer growthDomestic iron oreImported met coal

Low steel per capita – 35kg50+ Mt capacity plannedConstruction/automotive/consumer growthDomestic iron oreImported met coal

India

In addition to China steel growth will be driven by other countries, with a majority favouring the BF route.

Low per capita steel consumptionLow cost steel production base, export semisDomestic iron oreImported met coal

Low per capita steel consumptionLow cost steel production base, export semisDomestic iron oreImported met coal

Brazil

Page 17

Steel Process Trends

BOF

EAFOH

0200400600800

100012001400

1998

1999

2000

2001 2002

2003

2004

2005

2006F

cst

(Mt)

• BOF maintaining share of total global steel production

• OH declining, being replaced by BOF, EAF

• EAF growing in industrialised countries.

• BOF primary growth in developing countries

OH8%

BOF58%

EAF34%

OH3%

BOF66%

EAF31%

2000 2006fSource CRU

Page 18








Page 19

Manganese Alloy Products

Produced from HCFeMn via OBC* route or SiMn via electrothermic route

80%-81%MCFeMn, LCFeMn

Refined

Can be produced from lower grade ore

60%-77%SiMnSilicomanganese

Requires high % of high grade ore

65%-79%HCFeMnFeMn

High Carbon Ferromanganese

CommentsProduced in BFProduced in EAF

%MnChemical Formula

* Oxygen Blown Converter

Page 20

SiMn57%

HCFeMn33%

MCFeMn10%

World Manganese Alloy Production 2005Product Split

Source: IMnI

~ 10.6 Million tons

Page 21 Source: IMnI , BHP Billiton

Europe

355 619203

0500

1000150020002500

Mt

World Manganese Alloy Production 2005~10.6 million tons

China

1420

279

2750

0500

1000150020002500

Mt

CIS

406

1250

400

5001000150020002500

Mt

Asia Other

541 284 1580

5001000150020002500

Mt

India

255 47720

0500

1000150020002500

Mt

Africa/MEast

370 177 1430

5001000150020002500

Mt

Americas

155 473 1810

5001000150020002500

Mt

HCFeMn

S iMn

Refined

0 500 1000 1500 2000

Page 22

Manganese Alloy Production

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000Ch

ina

Othe

r

Niko

pol

Eram

et

BHP

Billito

n

Priva

t

CVRD Ind

ia

Assm

ang

Kt

Source: IMnI & other industry sources

Page 23

Manganese Alloy Uses In Steel

Mainly used in Crude / Mild steel

Desulphurisation / strengthening

5-10kg Mn/mt steel

Consumed in the form of :

% % MnMnTons high grade ore / ton alloyTons high grade ore / ton alloyElectricity (kWh/Electricity (kWh/mtmt))

FeMnFeMn

78%78%2.12.1

2 6002 600

65%65%1.851.85

4 0004 000

80% 80% 2.52.5

3 1003 100

MCFeMnMCFeMn

Source: Roskil l, CRU

SiMnSiMn

Page 24

0%

20%

40%

60%

80%

100%

Integrated Minimill Flat Minimill Long Speciality

HCFeMn SiMn MCFeMn

Manganese Alloy Uses In Steel

12%

9%

56%

32%42%

49%

2%

81%

17%32%

30%

38%

Source: Monitor

Page 25

Manganese Alloy Supply/Demand

7,5198,188

9,115

10,671 10,777

7,388

8,210

9,179

10,735 10,554

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2002 2003 2004 2005

Demand Supply

Mn Alloy (Kt)

Source: IMnI

Strong growth in Mn alloy demand on the back of strong growth in crude steel production

Page 26

Impact of Crude Steel Industry Dynamics On Manganese UseThe steel industry is continually changing due to the impact of new technology, ongoing capacity rationalisation and shifts in customer demand.

Drivers that will impact on Manganese demand:Changes in steel making technologyType of steel making process being used ⇨ integrated steel plants Vs mini mills

New steel grade designs

Page 27

Manganese Alloy IndustryAlloy Production Cost Structure

Other Costs12%

Labour13%

Electricity20%

Ore 38%

Trade barriers

Tariffs

Anti-dumping duties

Social dimensions

Environmental costs

Socio-political factors

Other Raw Materials14%

Direct CostsDirect CostsDirect Costs Other CostsOther CostsOther Costs

While ore is the dominant cost component, processing costs which vary by location are also significant. The location of alloy plants relate directly to both electricity and labour costs.

Rail Costs3%

Average cost s tructureacross major alloyers

Source: CRU

Page 28

Comparative Electricity Prices

05

1015202530354045505560

Kaza

khst

an

Russ

ia

RSA

Norw

ay

Aust

ralia

USA

Ukra

ine

Polan

d

Mace

doni

a

Chin

a

Rom

ania

Japa

n

Mexic

o

SKor

ea

Indi

a

US mills/KWh

Source: CRU

1 mill = US$0.1/KWh

Page 29

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Q1-9

5

Q4-9

5

Q3-9

6

Q2-9

7

Q1-9

8

Q4-9

8

Q3-9

9

Q2-0

0

Q1-0

1

Q4-0

1

Q3-0

2

Q2-0

3

Q1-0

4

Q4-0

4

Q3-0

5

Q2-0

6

HCFeMn SiMn

Manganese Alloy IndustryPricing Trends

Source: CRU

US Dealer Fob Warehouse $/t (Nominal)

Page 30








Page 31 Source: IMnI

India

Americas Africa/MEast

>30% and <44% Mn

< 30%Mn

> 44%Mn

- 1, 0001, 0003, 0005, 0007, 0009, 000

11, 00013, 000

2003 2004 200 5

Mt

World Manganese Ore Supply25.5 Mt ore In 2003 --> 29.8 Mt ore in 2004

- 1,0001,0003,0005,0007,0009,000

11,00013,000

2003 2 004 2 005

Mt

- 1,0001,0003,0005,0007,0009,000

11,00013,000

2003 2 004 2 005

Mt

China

CIS

- 1, 0001, 0003, 0005, 0007, 0009, 000

11, 00013, 000

2003 2004 200 5

Mt

Asia Other*

*Australia, Burma, Indonesia, Phillipppines, Taiwan, Vietnam, Korea

- 1, 0001, 0003, 0005, 0007, 0009, 000

11, 00013, 000

20 03 2004 200 5

Mt

02, 0004, 0006, 0008, 000

10, 00012, 000

2003 2004 200 5

Mt

Page 32

Manganese Ore Supply/Demand

7,389 7,687

8,637

10,784 10,749

7,881 8,1338,619

10,715

11,801

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2002 2003 2004 2005

Demand Supply

‘000 tons Mn contained

Source: IMnI

Page 33

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

72 76 80 84 88 92 96 '00 '04Japan FY

Manganese Ore Industry Price Trends

$/mtu (Fob, 48% Mn)

Source: Tex report

Page 34








Page 35

Management Structure

Samancor Ltd

BHP Billiton Anglo American

Samancor Manganese

Mines Alloys MMCVessels

Mamatwan

Gemco

Metalloys

Temco

Marketing

Page 36

HOTAZEL GEMCO 3.2Mtpa

TEMCOSiMn 120ktpaFeMn 130ktpaSinter 330ktpa

MetalloysFeMn 390ktpaSiMn 100ktpa

AdvalloyMC FeMn 75ktpa

Business OverviewSamancor Operations

Ore

Ferroalloy

Wessels 1MtpaMamatwan 2Mtpa

Page 37

Business OverviewSouth African Operations

HotazelJohannesburg

Saldanha BayPort Elizabeth

±. 900

km.

±. 1

0 50

k m.

AFRICA

RSA

Wessels Mine

Hotazel

Mamatwan Mine Kuruman

LEGENDTownsMinesPortsMn FieldRailway lines

Metalloys SmelterAdvalloy Smelter

Meyerton

HotazelDurban

.

.

+-700 km

Page 38

Business OverviewAustralian Operations

GROOTEEYLANDT

TEMCO

Page 39

Mn Resource base – June 2005

12.838.569.3Mamatwan(South Africa)

17.912.524.7Wessels(South Africa)

15.7103.5173.3GEMCO(Australia)

Reserve life (years)

JORC reserves (Mt)

JORC resources (Mt)

CSM Manganese deposits

LOM based on ROM tonnes: • GEMCO 6.6Mtpa, • Wessels (HG only) 0.7 Mtpa, • Mamatwan 3.0 Mtpa

Page 40

Metalloys / Advalloy Temco

82MVA SiMn (4F)2x75MVA FeMn1x81MVA FeMnMC Converter

Capacity390,000tpa FeMn100,000tpa SiMn75,000tpa MCFeMn

7 Furnaces

33MVA FeMn/SiMn36MVA FeMn/SiMn54MVA SiMn3x15MVA SiMn1000tpd Sinter Plant

Capacity130,000tpa FeMn120,000tpa SiMn330,000tpa Sinter

4 Furnaces

Metalloys / Advalloy

Temco

Page 41

In conclusion….

BHP Billiton via Samancor is:

A producer of High Grade Manganese Ore

An Integrated Alloyer ⇨ supplying the global market with high quality Manganese alloy products, such as MCFeMn, HCFeMn & SiMn over the long term

Backed by long life reserves providing a sustainable future

Documents

060907 Mn Alloys Presentation Sept 06 v3 - BHP Billiton · PDF filefavouring the BF route. Low per capita steel ... Socio-political factors Other Raw Materials 14% ... Durban.. +-7