BJM Southern African Energy

Conference

Carl Grim

Chief Executive Officer

Overview of Aveng

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Corporate Highlights (year ended 30 June 2007)

• Revenue up by 38% to R22 billion

• Operating profit (excluding non-trading items) up 111% to R1,3 billion

• Operating margin up from 3,9% to 5,9%

• Headline earnings up 122% to R1,3 billion

• Cash generated by operations of R2,9 billion

• Sale of Holcim concluded in manner that support BBBEE and benefits

shareholders

• Share repurchase of R3,5 billion

• Dividend up by 124% to 85 cents

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Operating Highlights

• McConnell Dowell revenue up by 95%, EBIT margin to 5,7%

• Grinaker-LTA operational cash flow: R629m with margin acceleration plan in

place

• Order book up 70% to R19 billion

• Continued strong performance from Steel & Allied cluster

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Business segmentation - Revenue

McConnell Dowell Corporation

26%

Manufacturing12%

E+PC1,3%

Grinaker-LTA 34%

Moolmans8%

Trident Steel19%

35%

13%

18%

2% 10%22%

June 2007 June 2006

Engineering & Construction: SA & Africa cluster

Steel & Allied cluster

R22 billion R16 billion

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Organisational structure

Aveng LimitedCarl Grim

Engineering &Construction

Australasia & Pacific

E+PCFrank Saieva

Engineering & Construction SA and Africa

Grinaker – LTANeil Cloete

MoolmansBrian Wilmot

Trident SteelRichard Martin

Steel and Allied

McConnell DowellDavid Robinson

ManufacturingDoug Keet

Director: FinanceDennis Gammie

Company Sec.John Baxter

Clusters

Operating Groups

Continuous Improvement Group

Nick Bell

Business DevelopmentBuzwe Yafele

RiskHylton Macdonald

Human ResourcesJuba Mashaba

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Construction order book (two years)

8.2

9.88.9 8.7 8.7

11.3

19.1

June 2001 June 2002 June 2003 June 2004 June 2005 June 2006 June 2007

Rbn

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Outlook for global energy

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Principal drivers of global energy demand

Rapidly expanding and robust consumption-based economies

Source: World Bank

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Global investments in energy projects

Source: World Bank

Africa expected to invest about 4% of GDP in energy in the next 30 years

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12% Shipping& Ports

54% Transmission & Distribution

46%Power

Generation

88% Mining

15%Other

13% Refining

72% Exploration &

Development

5% Exploration& Development

8% LNG Chain

37% Transmission & Distribution and

Storage

• Total investment required for the energy supply

infrastructure worldwide over the period 2001-

2030 is expected to amount to US$ 16 trillion, or

US$ 550 billion a year

• Although the total sum of investment needed is

large in absolute terms, it is modest relative to the

size of the world economy, amounting to only

about 1% of global GDP on average over the next

thirty years

• Cumulative investment of US$10 trillion in power-

sector infrastructure will be needed – equivalent to

60% of total energy sector investment

• The power sector in developing countries will

require more than half of the global investment,

exceeding US$5 trillion. Two thirds must flow into

developing Asia

Source: International Energy Agency

Relative global energy spend by sector

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Coal will continue to lead the composition of energy sources...

Despite current trends to move towards cleaner fuels, coal will continue to be the largest contributor to electricity generation in the foreseeable future

Source: DPE

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Global private participation in energy sector

• Private participation in 1 307 projects worldwide from 1990 to 2005

– 5,3% undertaken in Sub-Saharan Africa (2,4% by value)

• In 2004 the global per capita electric power consumption world standard was

2 606 kWh

• By comparison, the per capita consumption in Sub-Saharan Africa was

550 kWh

Source: World Bank

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Factors driving rapid energy expansion in Africa

• Energy intensive industries investing in areas that have low world standard labour and

energy costs

• Lower environmental standards than OECD or developed country norms

• Negative or slow population growth in OCED countries with non-OECD countries

experiencing strong population growth, infrastructure development, access to

transportation, etc

• Increased production of oil, biofuels, coal-to-liquids (in RSA and China by Sasol) and

gas-to-liquids leading to increase in production facilities and GDP per capita

• Higher international oil prices will force importing African oil countries to seek

alternative energy sources

• Low base per capita electrical power demand

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African electricity generation

• US$185 billion or 1% of GDP from 2004 to 2030• Coal is expected to make up about 46% of Africa’s portfolio, with gas increasing from

25% to 38% Source: International Energy Agency

* Assuming Grand Inga

built to full capacity of

39 000MW

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Drivers of energy expansion in South Africa

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Changes in the South African energy arena

• Energy sector accounts for about 15% of GDP and supports about 250 000 jobs

• Abundance of coal enables low-cost power production with above-average energy intensity

• Eskom expected to spend R150 billion over the next five years to build new power stations and enhance distribution and transmission network

– In addition, the proposed 3 600 MW Mmamabula coal-fired power plant in Botswana valued at more than US$5,5 billion

• Government has provided for 30% of the new power to come from IPPs

– Bethlehem Hydro, the countries first IPP, began construction in 2007, awarded to NuPlanet and Energy Development Corporation (EDC)

– Durban and Port Elizabeth IPP project recently awarded to consortium led by AES

Source: Economist Intelligence Unit

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ImportsHydroPumped storage

NuclearCoal

ElectricityCoal

Liquid fuelsGasRenewables

Eskom electricity generation mix

South Africa’s energy demand

• Eskom with 95% of the market,

currently derives most of its capacity

from coal

• Decreasing to about 70% by 2025 with

nuclear power increasing to 17% to

28% range

• 1 600MW of renewable energy will

also be added to the SA energy source

mix by 2025 in the form of solar and

wind power

Source: DPE and Eskom Annual report 2007

South African energy generation follows the global trend...

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Eskom capital expenditure

Total: R113 billion between 2007 and 2011Source: 2007 Budget Review

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20

Eskom will spend R150 billion over the next 5 years

15 753

19 81923 572 23 476 22 981

3 228

6 130

5 2733 803

1 954

3 806

4 340

4 5824 096

4 229

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2008 2009 2010 2011 2012

Corporate Distribution Transmission Generation

Rand

(M

illio

n)

Eskom breakdown from AFS (Rand Millions) 2008 2009 2010 2011 2012 TotalGeneration 15 753 19 819 23 572 23 476 22 981 105 601Transmission 3 228 6 130 5 273 3 803 1 954 20 388Distribution 3 806 4 340 4 582 4 096 4 229 21 053Corporate 813 699 753 460 480 3 205Total 23 600 30 998 34 180 31 835 29 644 150 247 Source: Eskom

Indicative Medupi local spend of ±R20 bn (out of total cost of R80 bn)

Boiler & Turbine

Packages

Turbine

R13 billion

Boiler

R17 billion

OEM supply

Turbine/Generator

(+/-R8 billion)

Local Erection and

Specialised parts

(+/- R5 billion)

Engineering

& Design

Local Content/

R13bn

Tx & Dx

Pressure Parts

Busbars (R6bn)

Plant Erection

R7 billionStructural Steel

LP Piping

M&E

Our experience and track record

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Matimba Power Station

Client: Eskom

Completion: 1991

Project scope:

• Boiler House Construction - Units 1 to 6 with five

coal mill foundations, four fan bases, a 120m high

freestanding lift shaft, main boiler supports, blow

down and ash dumps per boiler house unit

• Turbine Hall Construction - Units 5 and 6

including base and foundations for the 665MW

turbo-generators, and ancillary auxiliaries for the

machines

• Water Treatment Plant

• Electrostatic Precipitators

• Materials Handling System

• Ancillary Electrical Reticulation

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Majuba Power Station

Client: Eskom

Completion: 1995 - 1998

Project scope:

• Civil works for all terrace structures in front and

behind boilers for East and West units 1 to 3

• Design and construction of 250m high multi-flue

chimney including ancillary electrical reticulation;

aircraft warning lights and lightning protection

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Kendal No.1 and No.2 Chimney

Client: Eskom

Completion: 1986 - 1988

Project scope:

Chimneys Design and Construction

•Ancillary Electrical Reticulation

•Aircraft Warning Lights

•Lightning Protection

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Duvha

Client: Eskom

Completion: 1983 - 1988

Project scope:

• Six cooling towers, each turbine generator of

600MW with 135m high reinforced concrete

shell

• Construction of bulk coal stockyard terrace

for the 3600MW power station

• Complete civil works to station foundations,

boiler and fan foundations, turbine generator

blocks, including columns and foundations,

cooling water pipe work and pump houses

including all buildings, drainage and high

voltage yards

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Matla

Client: Eskom

Completion: 1984 and 1991

Project scope:

• Construction of Matla No.2 Chimney with

height of 269m and outside diameter of 22m

• Supply and installation of the structural

steel including flue inlets, staircase tower,

louvers, electrical installation, lightning

protection and aircraft warning lights

• Civil works for the Wet Ash Handling Plant

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Kriel Access System

Client: Eskom

Completion: 1991

Project scope:

Built the following:-

–Cooling Towers

–Ash Handling Plant

–CW Ducts

–Turbine House

–Boiler House

–Ancillary Electrical Reticulation

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Hendrina Power Station

Client: Eskom

Completion: 1991

Project scope:

Built the following:-

–Cooling Towers

–Boiler House

–Electrostatic Precipitators

–Coal Plant

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Client: Eskom

Completion: 1984

Project scope:

•Construction of main civil works and

also sea water pump houses and additional

buildings

•Pressurised Water Reactor (PWR) power

station with electrical output of 1 844 MW

Koeberg Nuclear Power Station

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Drakensberg

Project scope:

• Machine and transformer halls

• Tailrace tunnel

• Surge shafts

• Access tunnels

• Underground control room

• Surface Works

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Gariep

Orange River – Fish Tunnel Construction

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Project scope:

•Dam Wall

•Underground Power Station Complex

•Transmission Lines

•Diversion Tunnels

•Coffer Dams

•Apollo Sub-Station

Cabora Bassa

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St Aubin Power Station, Mauritius

Client: CTDS / Sotramon

Completion: 2005

Project scope:

• Civil works for a privately financed 35MW coal fired power station for electricity supply to the

national grid which included boiler and turbine bases and houses, cooling towers, coal silo and

external works

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Belle Vue Power Station, Mauritius

Client: Compagnie Thermique De Belle Vue

Completion: 1999

Project scope:

The civil works included heavy reinforced concrete foundations to all structures; cooling towers, silo,

reservoirs, stores, warehouses, office block and main building, steel superstructures to main plant

buildings and associated bulk earthworks, pipelines and infrastructure work

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Bongong Hydro Power Unit (Victoria, Australia)

Client: AGL Southern Hydro

Completion: 2009

Project Scope:

The Bogong Power development project

consists of a network of tunnels and shafts and

the construction of a new 140 MW

underground hydro electric power station near

the Victorian ski fields at Falls Creek.

– 6.5 km of 5 m diameter hard rock TBM

tunnel

– 1.3 km of drill and blast tunnels

– 250 m of 5 m diameter shafts

– 5,000 t penstock liners

Project Description

Kogan Creek is a 750MW single turbine coal-fired power station situated approximately

280km West of Brisbane and will be the largest single unit in Australia

Civil & Building contract of approximately 30,000m3 of reinforced concrete forming the

footings for all plant items. Chimney contract – design & construction of a 160m high slip-

formed concrete windshield with a 7m diameter single steel flue

Client

Siemens Limited

Location

Queensland, Australia

Value

R274 million

Kogan Creek Power Station

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Temora to Lake Cowal 132kV Transmission Line, Australia (AUD$4m)

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Groundline and Overhead Inspections, Australia (AUD$38m)

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Klipbank Opencast Coal Mine

Project Description

Mining Coal and Overburden

Client

Ingwe Colliery & BHP Billiton

Location

Mpumalanga Coalfields,

South Africa

Value

R1 billion

Duration

May 2000 to

February 2008

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Aveng’s positioning for the capital spend

• Aveng has already played a significant role in Southern Africa and Australia’s Power

Generation heritage

• Based on our experience and capability, we recognise our role to participate in the

future expansion of the power industry in these markets

• Gearing up our vast resources to help deliver our rapidly expanding power generation

infrastructure

– Combined skill sets within the Group

– Partnerships with external companies for specialist capability

– Ability to craft holistic turnkey packages which reduce our client's risk profiles and resource

requirements

– Ample financial resources

– BBEEE credentials and ability to leverage local content

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The World at Night: 1.6billion people, 25% of the world’s population, live in the dark

Canada: 58% hydro power

USA: 91% fossil fuels and nuclear power

Iceland: 100% hydro and geothermal power

Norway: 91% hydro power

Britain: 96% fossil fuels and nuclear power

Brazil: 83% hydro power generation

Africa: Over 509m people live without access to electricity

India: 713m out of 1.4bn live without electricity

China: 98% of people have access to electricity but 82% of that is fossil fuels generated

Australia: 92% fossil fuel generation

New Zealand: 68%hydro and geothermal power

Energy is the backbone of global economic growth and development

• Despite the many areas of prosperity 25% of the world’s population live without electricity

• To achieve the UN Millennium Development Goals (UNMDG) a combination of stand-alone and grid-connected electricity development will be needed

• This is to alleviate people from poverty in an environmentally sustainable manner

• There are abundant sources of renewable energy on each continent (hydro, geothermal, biomass, wind and solar)

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www.aveng.co.za

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Disclaimer

This presentation contains forward-looking statements about the company’s operations and financial conditions.

They are based on Aveng Limited’s best estimates and information at the time of writing. They are nonetheless

subject to significant uncertainties and contingencies many of which are beyond the control of the company.

Unanticipated events will occur and actual future events may differ materially from current expectations due to new

business opportunities, changes in priorities by the company or its joint ventures as well as other factors. Any of

these factors may materially affect the company’s future business activities and its ongoing financial results.

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