Embed Size (px)
Citation preview
June, 2011
INSERT IMAGE INSERT IMAGE
GUJARAT NRE COKE LIMITED
The Undiscovered Coking Coal Producer
INSERT NEW
SLIDE
DISCLAIMER & IMPORTANT NOTICE
This investor presentation (Presentation) has been prepared by Gujarat NRE Coke Limited (Gujarat).
Summary information
This Presentation contains summary information about Gujarat and its activities current as at the date of this Presentation. The information in
this Presentation is of general background and does not purport to be complete. It should be read in conjunction with Gujarat‟s other periodic
and continuous disclosure announcements lodged with the relevant Stock/Securities Exchange.
Not financial product advice
This Presentation is for information purposes only and is not a prospectus or offer document, financial product or investment advice or a
recommendation to acquire Gujarat shares and has been prepared without taking into account the objectives, financial situation or needs of
individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard
to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Gujarat is not licensed
to provide financial product advice in respect of Gujarat shares.
Future performance
This Presentation may contain certain statements and projections provided by or on behalf of Gujarat with respect to anticipated future
undertakings. Forward looking words such as, “expect”, “should”, “could”, “may”, “predict”, “plan”, “will”, “believe”, “forecast”, “estimate”, “target”
and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable
jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements.
These forward-looking statements reflect various assumptions by or on behalf of Gujarat. Accordingly, these statements are subject to
significant business, economic and competitive uncertainties and contingencies associated with exploration and/or mining and/or coke
production which may be beyond the control of Gujarat which could cause actual results or trends to differ materially, including but not limited to
commodity price fluctuations, exploration results, ore reserve and mineral resource estimation, environmental risks, general operating risks,
legislative and regulatory changes, project delay, ability to meet additional funding requirements, factors relating to title to properties,
dependence on key personnel, share price volatility, approvals and cost estimates. Consequently, there can be no assurance that such
statements and projections will be realised. Neither Gujarat, or any of its affiliates, advisers, consultants, agents or any of their respective
officers or employees make any representations as to the accuracy or completeness of any such statement of projections or that any forecasts
will be achieved. Such forward-looking statements only speak as to the date of this Presentation and Gujarat assumes no obligation to update
such information.
2
Additionally, Gujarat makes no representation or warranty, express or implied, in relation to, and to the fullest extent permitted by law, no
responsibility or liability (whether for negligence, under statute or otherwise) is or will be accepted by Gujarat as to or in relation to the accuracy
or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this
Presentation or any omission from this Presentation or of any other written or oral information or opinions provided now or in the future to any
recipient of this Presentation or its advisers. In furnishing this Presentation, Gujarat undertakes no obligation to provide any additional or
updated information whether as a result of new information, future events or results or otherwise. Nothing in this material should be construed
as either an offer to sell or a solicitation of an offer to buy or sell securities.
Investment risk
An investment in Gujarat shares is subject to investment and other known and unknown risks, some of which are beyond the control of Gujarat.
Gujarat does not guarantee any particular rate of return or the performance of Gujarat. Persons should have regard to the risks outlined in this
Presentation.
Not an offer
This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this
Presentation nor anything contained in it shall form the basis of any contract or commitment. In particular, this Presentation does not constitute
an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any person that is, or is acting for the account or benefit of
any "U.S. person" (as defined in Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act")) (“US Person”). This
document may not be distributed or released in the United States or to any U.S. Person. The securities in the proposed offering have not been
and will not be registered under the U.S. Securities Act, or under the securities laws of any state of the United States. Accordingly, the
securities in the proposed offering may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of,
U.S. Persons, except in compliance with the registration requirements under the U.S. Securities Act and any other applicable securities laws or
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S.
state securities laws.
DISCLAIMER & IMPORTANT NOTICE
3
SECTION A
India’s Changing Coking Coal & Met Coke Scenario
WORLD STEEL CONSUMPTION TRENDPOWERED PRIMARILY BY CHINA
AS THE DEVELOPED WORLD DECLINED, ASIA GREW
NAFTA
EUJapa
nUSSR
/RussiaChina India Brazil
South Korea
Middle East
ASEAN
World
1971 143 138 58 115 24 8 7 2 6 4 579
2009 83 117 53 25 542 55 19 45 42 39 1125
Change 2009/1
971 (mt)
-60 -21 -5 -90 518 47 12 43 36 35 546
Source : WSA
(1971 – 2009)
21st Century – China remains the key growth driver
Elephant on the move – India emerges as a growth economy
NAFTA EU 27 Japan Russia China India Brazil S. Korea ASEAN World
Consumption(Avg.)
137 168 73 30 332 41 19 48 37 1024
% Share 13% 16% 7% 3% 32% 4% 2% 5% 4% 100%
CAGR%2001-2009
-6.1% -4.1% -4% -1% 16.7% 8.6% 1.4% 2.2% 3.6% 4.7%
Source : WSA
The current decade belongs to India
India projected to be the fastest growing market
while growth in China would be tapering in coming years
NAFTA EU 27 Japan CIS China India World
% Share (2011) 9% 11% 5% 4% 45% 5% -
% Share (2015) 9% 12% 4% 4% 42% 6% -
% Share (2020) 8% 11% 4% 5% 39% 7% -
% Growth (2011/2010) 8% 6% -1% 4% 14% 11% 5%
% CAGR (2011-2015) 4% 7% 4% 3% 9% 6% 5%
% CAGR (2015 -2020) 3% 2% 1% 2% 7% 6% 3%
India’s finished steel consumption trend
Source: Annual report 2009–10, Ministry of Steel, Government of India, E&Y.
*Annualizing the data till December 2009
0
10
20
30
40
50
60
70
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10*
Consumption (in million tonnes)
STRONG DOMESTIC DEMAND
Investment in Infrastructure (% of GDP)
Steel demand to grow at 10 to 12% over the next 2 years
Infrastructure to be one of the key drivers in steel consumption growth
Source: Steel Products update, CRISIL Research, E&Y, June 2010
Source: Goldman Sachs via Thomson Research, E&Y, 11 October 2010
India’s Projected Steel Capacity by 2012-13
Source: ministry of steel
Investor Existing Brownfield Greenfield Total by 2013
SAIL 12.84 8.56 - 21.40
RINL 2.90 3.40 - 6.30
TATA STEEL 6.80 3.20 3.00* 13.00*
ESSAR STEEL 4.60 3.90 6.00* 14.50*
JSW STEEL 6.60 4.40 - 11.00
JSPL 2.40 4.80 3.25 10.45
ISPAT Industries 3.60 0.60 - 4.20
Bhusan Power & Steel 1.20 1.60 - 2.80
Bhusan Steel 0.80 2.20 - 3.00
Others & Secondary 31.00 3.20 - 34.20
Total 72.74 35.86 12.25 120.85
* TATA Steel (Kalinga Nagar-Orissa) and Essar Steel (Paradeep-Orissa) Greenfield projects are likely to be delayed beyond 2012
Capacity Addition projections till 2015
Year Capacity Addition (MTPA) Total Capacity (MTPA)
2010 72
2011 7 79
2012 17 96
2013 28 124
2014 20 144
2015 9 153
Projections as per work completed till date of the proposed projects and
MoU signed
Source: projects monitor
URGENT NEED FOR COKING COAL TO MEET INDIA’S
PROJECTED STEEL GROWTH
2020 Steel increaseIncrease in Met Coal
Demand by 2020
10%pa 100 61
12%pa 135 84
15%pa 202 132
20%pa 361 226
• 10%pa will see a doubling of import demand
• 20%pa increase is equal to current seaborne market for all Met Coal
MT
India’s domestic coking coal scenario
• Although India has large coal reserves it is very short of prime HCC
• Domestic Coking coal is:-
o High ash
o Tends to have poor coke strength
o Requires imported high quality HCC
o Not really suitable for PCI
• Production of domestic coking coal has declined since 2004
• Coke production has risen by almost 30% since 2004 and is poised to grow
further
The future of India’s coking coal is Imports
Increasing Coking Coal Demand (in MT)
Source: Coal Industry Annual Review, CRISIL Research, November 2009, E&Y
0
10
20
30
40
50
60
70
2008 2009 2010F 2011F 2012F 2013F
Demand of Coking Coal Production
FORECAST OF INDIAN COKING COAL IMPORT (IN MT)
Source: various reports and internal estimates
Global Trend in Coking Coal
• With increased demand, coking coal supply will find it difficult to
meet demand
• Coking coal price too would remain extremely high for some years
• China likely to dominate and its offshore mine and corporate
ownership is likely to accelerate. India to follow suit
• Australia the major potential source has its own limitations of
logistics & capacity
• Real anxiety of availability when seaborne demand breaches
>>400Mt tonnes/year.
China’s Emergence as a major marketChina has become a major importer of coking coal in less than 10 years with major
impact on coking coal trade flows in 2009 which is going to stay for the entire decade
Forecast of Chinese coking coal import for the decade
Source : CRU Analysis
Global Coking Coal Demand - 2020
Million Tonnes 2008 2009 2010 2011 2012 2015 2020
A: Seaborne Hard Coking
138 139 161 182 191 213 243
B: Seaborne Semi-soft/weak
44 35 48 55 58 65 74
C: Seaborne PCI 36 32 40 47 50 57 69
Sub-Total SS & PCI (B+C)
80 67 88 102 108 122 143
All Met Combined 218 206 249 284 299 335 386
Source: Merlin Trade and Consultancy
Ltd
THE GLOBAL COKING COAL SUPPLY FRONT
• Australia remains the major supplier of Coking Coal
• But production not likely to increase to match demand –
infrastructure remains the main bottleneck in further
expansion
• Natural disasters like Floods in Queensland which supplies
nearly 60% of coking coal globally further strains the already
scarce market
• New locations emerging – Indonesia, Siberian Russia,
Mozambique, Mongolia.
• However quality concerns and infrastructure bottlenecks
remain
Sourcing of 400 Mt of Met Coal by 2020 –Global Scenario
• Eastern Russia – Early coal from Elga possible, but >10 Mt plus
would require investment in new port, rail
• Indonesia – Transportation & Logistics remain key
concern….Doubts on HCC availability and timing
• Mozambique – lots of coal but with promised deadlines unmet,
fails to inspire confidence……. Infrastructure for transportation
not ready
• This leaves us with = Canadian & a lot of Australian coking coal
Fundamental trends in Global Met coal supply
• Major challenges exist around infrastructure and cost
• New coal basins are coming on stream but have quality and / orpolitical factors
• Future coal quality is probably declining in current majorproducers
• Future coal costs are likely to be higher than today – with flowon effect to price
• Key issue for future is - will new supply arrive in time understrong demand conditions?
Major Coking Coal Supplying Countries to India
Source: ISMW
India - Securing Coking Coal Supply
• Further development of domestic coking coal reserves can ease the
situation somewhat
• Captive coal mining introduced in 1993
• But there are significant hurdles in domestic captive coal block
development
Time consuming processes for environmental & forest clearances
Problem of land acquisition – Resettlement and Rehabilitation
issues
Joint allocation of mines
Inadequate experience in mine development of the private players
Slow progress in domestic market mine development has compelled
steel and merchant coke producers to look overseas for coal assets
Met Coke demand is expected to rise by 150 to 200 MTPY in next 10 years going by growth projections in BRIC countries
World Met Coke Market
WORLD MET COKE EXPORTS
• Though Chinese coke
availability increased in
2010 over 2009, it is much
below the requirement
• Most of the Chinese Coke
went to Japan (approx 60%)
• Japanese export declined in
2010
• Columbia - a new entrant
exporting to Brazil & India
• India though is a major net importer, has been
exporting to Brazil, Japan and SE Asian Countries
WORLD MET COKE IMPORTS
• Imports recorded a considerable increase in 2010 over 2009
• Japan, USA, Germany and Brazil had impressive import demand –
indicating renewed buoyancy in the economy post recession
• However the import levels were much below the highs of 2008
• Indian imports remained almost stable
MET COKE PRICES ON THE HIGH –
FOLLOWING THE TREND IN COKING COAL PRICING
200
300
400
500
600
700
800Met Coke Price Movement (US$ / tonne)
Scenario Evolving – Met Coke Globally
• 40% export tax levied by China since August 2008 - production of coke for a
surplus for export is discouraged
• With Chinese Coke away from the market, a likely shortage of coke from
2011 – Difficult to meet the increasing demand supply gap
• Coke supply from other sources - e.g. Poland, Russia, Ukraine, Colombia,
Japan - has little potential for increase in future. These sources are
primarily in the western hemisphere, whereas demand is growing faster in
the eastern hemisphere.
• Once coke trade returns to levels of around 30 MTPA (say by 2012), it is
difficult to comprehend how other countries would meet the shortfall of
China’s 14 MTPA export capacity
The Indian Scenario
• India would continue to remain one of the largest markets for met coke
• Imports are primarily from Russia, Ukraine, Vietnam and recently Poland
and Columbia
• Upward pressure in the market has already built up on increase of
coking coal prices and its scarcity – Prices rising
• Large merchant coke demand from pig iron, ferro alloys and soda ash –
would remain in future
• Expected addition of another 4 MTPA coke capacity by 2013 – 14 to
cater to the :
▫ Increasing steel making capacity
▫ Export market by tapping the void created by China
INDIA AS A COKE EXPORTER
• Tapping The Huge Void - In 2007 Chinese export was 15 MT which got
reduced to 12 MT in 2008 and in 2009 it stood at just over an ½ MT,
recovering to just 3 MT in 2010
• Why India? At first glance not a natural coke exporter due to:
– Poorer quality coking coals
– Strong domestic demand growth
– Traditional significant coke importer
– Limited deep water ports
• However, some advantages
– Rapidly growing merchant coke producer
– Adoption of quick to build non recovery, heat recovery ovens
– In between Atlantic and Pacific markets
– Has already sold coke to Brazil, Japan, SE Asian and European
countries
SECTION B
GUJARAT NRE COKE LIMITED
GUJARAT NRE COKE LIMITED - A SNAPSHOT
Largest independent producer of Metallurgical Coke in India
Listed on the Bombay and National Stock Exchanges, with a market
capitalisation of around USD 0.65 billion (No. of shareholders 1,80,000)
Profit earning and dividend paying with strong financials and credit
rating of AA- for long term borrowing and PR1+ for short term
borrowing.
Met Coke capacity 1.434 million tons, being increased to 4 million tons
by 2014/15.
The only Indian Company to have exported LAMC from India (to
Argentina, Brazil, South Africa & Europe).
Strong focus on the Environment with ISO 14001:2004 & OHSAS
18001:1999 certification
Rated one of the top 10 company by 10-years profit performance in the
latest edition issued by Business Today on India’s Most Valuable
Companies
GNCL OPERATIONS…
HARD COKING COAL
(NSW, AUSTRALIA)RESERVES 125 MMT
RESOURCES 651 MMT
LOW ASH
METALLURGICAL COKE
1.434 MMTPA
Gujarat NRE Coking Coal Limited(ASX: GNM)
Reserves(Resources)
NRE NO. 1 – 92 (314) million tonnes
NRE Wongawilli – 33 (337) million tonnes
STEEL UNITTMT BARS : 0.311 MMTPA
BHACHAU UNIT0.324 MILLION MTPA
KHAMBALIA UNIT0.358 MILLION MTPA
(Leased)
AT DHARWAD0. 324 MILLION MTPA
AT BHACHAU0. 180 MILLION MTPA
Waste Heat Recovery
Power Plants
Khambhalia* 15 MW
Bhachau* 15 MW
Dharwad* 30 MW
Total 60 MW
Wind Power 87.5 MW
In Australia In India
Coal Washeries
(MTPA)Khambhalia 0.75
Bhachau 0.75
Dharwad 0.90
* Under implementation
DHARWAD UNIT0.248 MILLION MTPA
BOARD OF DIRECTORS
Mr. Girdharilal Jagatramka
Chairman Emeritus
•The main promoter of GNCL. Has more than five decades of businessexperience
Arun Kumar Jagatramka
Chairman & Managing Director
•25 years of professional and management experience
•All India 1st rank gold medalist Chartered Accountant
•Director of Pike River, Port Kembla Coal Terminal, NSW MineralCouncil and Australian Coal Research Association
•Appointed as an honorary NSW Sydney Ambassador to India
Mrs. Mona Jagatramka
Non-Executive Director
• 10 years of experience in management and administration
• Active in the management & human resources for Gujarat NREGroup
• Also on the board of Gujarat NRE Coking Coal Limited
Dr. Mahendra Kumar Loyalka
Non-Executive Director
• Leading medical practioner
• Past District Governor of Lions Club International
BOARD OF DIRECTORS (contd..)
Mr. Chinubhai R Shah
Non-Executive Director
• Former President of ICSI
• At present on the Board of Nirma Ltd., Adani Power Ltd., CadilaPharmaceuticals Ltd., Apollo Hospitals International Ltd., GujaratState Electricity Corpn. Ltd., etc.
• Also the Chairman of India Renal Foundation.
Dr. Basudeb Sen
Non-Executive Director
• Former CMD of IIBI
• Former Executive Director of UTI Mutual Fund.
• Holds directorship of various reputed Listed Companies viz. ITC Ltd.,South Asian Petrochem Ltd., etc.
Mr. Murari Sananguly
Non-Executive Director
• Former CMD of Kudermukh Iron Ore Company Ltd.
• Presently on the Board of Coal India Ltd.
Mr. Subodh Kumar Agrawal
Non-Executive Director
• Eminent Chartered Accountant
• Presently Member of Central Council of ICAI.
• Chairman, Committee for members in Industry (ICAI)
Sl. No.
Particulars % of Holding
1 Promoter Group 45.93
2 Banks, Mutual Funds & FIIs 31.61
3 Indian Public and others 22.46
Total 100.00
Listed on BSE & NSE
Script Code:
• For Ordinary Equity Shares: BSE – 512579 ; NSE - GUJNRECOKE ISIN no. - INE110D01013
• For B Equity Shares (DVR Shares) : BSE – 570003; NSE - GUJNREDVR ISIN no. - IN9110D01011
Face Value : Rs. 10 per share
Market Capitalization: Approx USD 0.65 Billion
SHAREHOLDING PATTERN
45.93%
22.46%
31.61%
Promoter Group
Banks, Mutual Funds & FIIs
Indian Public & Others
India’s largest independent producer of Metallurgical Coke
Total Capacity of1.434 million tonnes per annum
GUJARAT NRE COKE LTD
Unparallel Creator of Wealth
Generator of Employment
Over 100% compounded annual return
delivered to an investor
0
200
400
600
800
1000
1200
1400
1600
1800
Year Ended
31.03.2007
Year Ended
31.03.2008
Year Ended
31.03.2009
Year Ended
31.03.2010
Year Ended
31.03.2011
(Unaudited)
Rs
. In
Cro
res
Turnover EBITA
PERFORMANCE OF LAST 5 FINANCIAL YEARS
-120
-100
-80
-60
-40
-20
0
20
40
60
Dec
08
Mar
09
Jun
09
Sept
09
Dec
09
Mar
10
Jun
10
Sept
10
Dec
10
Mar
11
PAT (in Rs Cr)
GNCL PAT over last 10 Qtrs
Dec 08 to Mar 11
Cumulative 4 Years PAT
255.81
384.77 387.97 385.39 430.47
0
50
100
150
200
250
300
350
400
450
500
31st March 2007
31st March 2008
31st March 2009
31st March 2010
31st March 2011
PAT (in Rs Crores)
42
SECTION C
GUJARAT NRE COKING COAL LIMITED
GUJARAT NRE COKING COAL LTD OVERVIEW
ASX listed hard coking coal producer
» Market capitalization of ~A$0.66 billion
100% owner of two underground mines
in NSW, Australia
» NRE No. 1 & NRE Wongawilli
JORC reserves of 125 Mt and
resources of 651Mt
Majority of ROM coal sold under
contract to major shareholder (Gujarat
NRE Coke)
» Commercial terms based on market
formula
Targeting to increase ROM production
to 6.0Mtpa over the next 4 years
Wollongong
Kiama
Port Kembla
Port Kembla coal
loader 18 MtpaSutton
Forest
proposal
Berrima
Dendrobium
W. TahmoorAppin
Westcliff Northcliff
Southern
Coalfield
NRE No. 1
NRE WONGAWILLI
BHP Illawarra
Coal
Peabody
Metropolitan
Xstrata
Tahmoor
Capital structureKey shareholders
As at 18th May 2011
OWNERSHIP & CAPITAL STRUCTURE
Source: Yahoo Finance
LTM share price performance
EXPERIENCED BOARD
Board
Arun JagatramkaChairmanB.Com (Hons), FCA, AIMM
Chartered Accountant with 25 years of professional and management
experience
Director of Port Kembla Coal Terminal and NSW Mineral Council
Appointed as an honorary NSW Sydney Ambassador to India
Maurice AnghieIndependent Director &
Audit ChairmanBBus, FCA, FCPA, MAICD
Experienced financially qualified Professional with commercial skills and
legal/regulatory and governance expertise
Audit partner in chartered accounting firms for over 20 years
Current Director of Aditya Birla Minerals Limited
Don CarrollIndependent DirectorB.E (Mining), MAusIMM,
MAIDC
Over 30 years experience in the international mineral industries
Former senior executive with BHP Biliton where he held the positions of
Vice President Investor Relations Australia, General Manager Marketing
Asia, President BHP Billiton Japan, President BHP Billiton India.
Andrew FirekIndependent DirectorM.Sc, Ph D, FAusIMM,
FAIE
25 years experience in mining, mineral processing, construction,
commissioning and operations of coal, base and precious metals plants in
Europe, Africa and Australia
Former Group Leader at the CSIRO, Division of Fossil Fuels in Sydney
and was engaged in developing technologies to produce liquid fuels from
coal
Former founding Executive Director of Allegiance Mining NL and current
Director of Coalworks Limited
Mona JagatramkaDirectorB.Sc. (Hons)
10 years of experience in management and administration
Active in the management & human resources for Gujarat NRE Group
Also on the board of Gujarat NRE Coke Limited
STRONG MANAGEMENT STRUCTURE
Operations
Manager NRE
Wongawilli
Head of
Corporate
Relations
Chief
Financial
Officer
Company
Secretary/
IT Manager
Operations
Manager NRE
No.1
Steven Bow(28 years
Underground Coal
experience with
BHPB)
Dr. Chris Harvey
(35yrs coal industry
with NSW Dept.
Minerals and
Resources)
Naveen Kumar
Nanda
(16yrs Snr
Accounting)
Sanjay
Sharma
(12yrs
Business
Management)
Rhys Brett
(8yrs UG Coal
with Anglo,
Centennial &
Xstrata)
Management Committee
Arun Jagatramka
S Murari
P R Kannan
Sanjay Loyalka
BOARD OF DIRECTORS
NRE NO.1 COLLIERY
Located in the Southern Coalfields of NSW
» ~10km north of Wollongong
» ~16km from Port Kembla Coal Terminal
One of the oldest operating collieries in Australia
» Formerly South Bulli (Owned and operated by Shell)
Premium quality hard coking coal
Currently developing for longwall extraction with plans to install
longwall equipment by Dec 2011
» Target production capacity to >3.0 Mtpa by 2015
JORC reserves of 92MT and Resources of 314MT
NRE No.1 MINING AREAS
RESERVES & RESOURCES - NRE NO. 1 COLLIERY
Resources (Mt) Reserves (Mt)
Seam Measured Indicated Inferred Total Proven Probable Total
Bulli 12.0 31.2 13.3 56.5 3.2 26.2 29.4
Balgownie — 34.1 41.5 75.6 — — —
Wongawilli 13.5 62.2 107.1 182.8 11.7 50.9 62.6
Total 25.5 127.5 161.9 314.9 14.9 77.1 92.0
NRE No.1 Colliery
The Resources and Reserves reported are as prescribed by the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (2004
edition, The JORC Code, Clauses 37 to 39) and also using the terminology and the guidelines put forth in the 2003 edition of “Australian Guidelines for Estimating and
Reporting of Inventory Coal, Coal Resources and Coal Reserves”. Named Competent Persons consent to the inclusion of material in the form and context in which it appears.
NRE WONGAWILLI COLLIERY
Located in the Southern Coalfields of NSW
» ~20km south west of Wollongong
» ~14km from Port Kembla Coal Terminal
Consolidates 3 Collieries
» Elouera Colliery (previously owned by BHP)
» Avondale Colliery
» Part of the Huntley Colliery
Premium quality hard coking coal
JORC reserves of 33Mt and resources of 337Mt
Currently undertaking longwall extraction from remnant areas with plans
for new longwall panels to the west & south
» Target production capacity to >3.0 Mtpa by 2015
NRE WONGAWILLI
MINING AREAS
RESERVES & RESOURCES - NRE WONGAWILLI COLLIERY
NRE Wongawilli Colliery
Resources (Mt) Reserves (Mt)
Seam Measured Indicated Inferred Total Proven Probable Total
Bulli — 8 28 36 — 5.4 5.4
Wongawilli 48.0 44 106 198 16.5 11.5 28
Tongarra — — 103 103 — — —
Total 48.0 52 237 337 16.5 16.9 33.4
The Resources and Reserves reported are as prescribed by the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (2004
edition, The JORC Code, Clauses 37 to 39) and also using the terminology and the guidelines put forth in the 2003 edition of “Australian Guidelines for Estimating and
Reporting of Inventory Coal, Coal Resources and Coal Reserves”. Named Competent Persons consent to the inclusion of material in the form and context in which it appears.
Excellent Rail – Road linkage
All product transported through
uncongested Port Kembla Coal terminal
Regional rail and port infrastructure
capacity of 18Mt
Gujarat NRE holds 16%equity in Port Kembla CoalTerminal and a seat on theBoard.
EXPORT INFRASTRUCTURE POSITIONING
Wollongong
Port Kembla
Rail
Road
NRE No. 1
NRE
Wongawilli
• Port Kembla Coal Terminal remains an
unconstrained coal export port
― 13.8 Mt throughput in FY 2010
― ship loading capacity of 17.5 Mtpa
being increased to 25 Mtpa
• ROM coal from NRE No.1 is transported
via truck haulage to Port Kembla
― proven ability to transport up to 3
Mtpa
• ROM coal from Wongawilli is transported
via rail to Port Kembla
― historically up to 2 Mtpa has been
transported using existing
infrastructure
― the capital program budgets for an
infrastructure upgrade that will allow
for the transport of 4 Mtpa
GROWTH PLAN – PRODUCTION FOCUS
Mt
• FY 12 forecast production approximately 2.5Mt 650 kt contribution from Longwall at NRE No.1 commencing in
December 2011
•Target production 6 Mt by 2015Installation of Longwall in NRE no 1 mine & development of the Wongawilli Seam
Up gradation of Longwall at Wongawilli mine & development of southern areas of
Wongawilli seam
Upgradation of infrastructure at both mines -with latent capacity beyond current
business planPotential for Bulli seam mining/extraction at both mines to complement the
planned Wongawilli seam extraction
Cash operating costs (pre Royalty) , US $/t FOB PortKembla Coal Terminal for ROM coal (pre washing)
• Bord & Pillar, Development ~ US $120/t
• Longwall production
▫ @ 1.0 Mtpa ~ US $ 65/t
▫ @ 1.5 Mtpa ~ US $ 55/t
▫ @ 3.0 Mtpa ~ US $ 39/t
GROWTH PLAN – OPEX
NB: Costs normalised at long term exchange rate Aud to Usd = 0.8
GROWTH PLAN – CAPEX
Expansion Capex: circa $500 million
Current Status : NRE No. 1• Will result in > 4Mtpa capacity mine
• Wonga Mains development well advanced
• Tail Gate & Main Gate development advanced for LW installation in
Dec 2011
• 4 x New CM‟s purchased
• New 4,000 tph conveyor commissioned
• Order for new 3,500 tph Joy LW placed
Current Status : NRE Wongawilli• Will result in > 4 Mtpa capacity mine
• Wonga South Portals started
• 2 x New CM‟s purchased
• Order for Joy LW upgrade placed
GNCCL planned output by 2015
Poised to become
one of the largest
Hard Coking Coal
producers from
Australia in 4-5 years
ROM Coal – FOB Revenue
• Net revenue is calculated on the wash plant yield from the Run of
Mine production (ROM) for a hard coking coal product, energy coal
product and rejects, with each product allocated a market price.
For example 100 tonnes of ROM coal gives:
5o tonnes of hard coking coal at Peak Downs quarterly price;
25 tonnes of energy coal at Newcastle price;
25 tonnes of reject or waste material at no price.
• A deduction is then made for wash-plant costs, ocean dead freight on
reject tonnage, and local transport costs
• Historically this has resulted in ROM coal FOB price of ~52% to ~60%
of the FOB hard coking coal benchmark price.
Commitment to the Community
Fundamental requirement for success: humanity
Commitment to the Community
• Sponsor of various sporting
events
• Major sponsor of Cricket NSW
and South Coast Wolves
• Supporters of the Wollongong
Hawks National basketball team
• A long term commitment to the
Light & Hope Clubhouse
Foundation for mental health
• Employing more than 500 people in the Illawarra region
Accolades
In April 2008, appointed honorary
NSW “Sydney Ambassador” to
India by the Premier of NSW
Declared as the “Person of the
Year 2009” by the Illawarra
Mercury
Premier’s NSW Export Awards
The Australian Export Awards is a
national awards program which
recognizes and honors export
excellence thorough innovation and
commitment. The Company won the
2009 Premier’s NSW Export Award in
Minerals and Energy sector and
became one of the finalists at National
level.
COMPETENT PERSON STATEMENT
The information in this Presentation that relates to Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by, in relation to the Coal Resources for both NRE
Wongawilli Colliery and NRE No. 1 Mine, Mr Barry Clark who is employed by Bureau Veritas
International Trade Australia, and in relation to the Coal Reserves for both NRE Wongawilli Colliery
and NRE No. 1 Mine, Mr Kris Markowski, an employee of Gujarat NRE Coking Coal Ltd.
Mr Clark is a Member/Fellow of The Australasian Institute of Mining and Metallurgy or the Australian
Institute of Geoscientists. Mr Clark has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves‟. Mr Clark consents to the inclusion in
the Presentation of the matters based on his information in the form and context in which it appears.
Mr Markowski is a Member/Fellow of The Australasian Institute of Mining and Metallurgy or the
Australian Institute of Geoscientists. Mr Markowski has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Mr Markowksi consents
to the inclusion in the Presentation of the matters based on his information in the form and context in
which it appears.
