Upload
lamque
View
224
Download
1
Embed Size (px)
Citation preview
Arun Kumar JagatramkaVice Chairman & Managing Director
Gujarat NRE Coke Ltd (NSE: GUJNRECOKE)Chairman
Gujarat NRE Minerals Limited (ASX: GNM)
Developments in the IndianCoke and Steel Marketplace
- Australian Hard Coking Coal from an Indian Perspective
The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Gujarat NRE
Disclaimer
Vision 2020India on Steroids
100 million tons of steel(since scaled up to 200 million tons)and already talking about 300 million tons
“How do you project your steel production – you are already in
2010 according to earlier estimates !”
An important point to note
“In order to produce 100 million tons of steel, India will need to consume 100 million tons of steel – which will come first is the million
tons question”
“Though India is a low-cost producer, it is going to have a problem because of the fact that when you want to graduate from 35-40 million tons to 150-250 million tons — that is what the growth rate is going to take us to another 10-15 years — you require lot of new
innovations, lot of new thinking, you require a vision.”- B. Muthuraman, MD, TATA STEEL
The New Era of steel making dawned in
1947India had three units
Two of them in the Private Sector (TISCO & IISCO)
Total Capacity 1 million tons
China too had almost similar capacities …(one million ton in 1949)
It took China 47 years
to commission its first 100 million tons of steel
capacity5 years to commission the
next 100 million tonsAnd
A mere two years to score its triple hundred.
The rest is history!
India• Today, India is the 5 th.
largest crude steel producer in the world.
• In 2007-08 (Apri-Feb''08), production of Finished Steel was 46.9 million (annualised 51.1 million tons) as against 44.4 million tons in 2005/06
• Steel Production target revised to 110 mt by 2011-12, to 300 mt by 2020
Year 2020
300 million tons of steel
SAIL 12.0TATA STEEL 30.0VIZAG 6.5MITTAL 12.0POSCO 12.0ESSAR 11.0JINDAL 20.6BHUSHAN 3.1OTHER (MISC) 7.0
Total 114.2
Additional Crude Steel Capacity being planned in India
million tons
The world’s who’s who of steel making are waiting :• Arcelor Mittal, the world's largest steelmaker, plans to set up two greenfield
steel projects in India each with a capacity of 12 million tonne per annum (mtpa).
• Acerinox SA, the world's second-biggest stainless steelmaker, is joining hands with Japan's Nisshin Steel to build a steel plant in India.
• Tata Steel, the world's fifth largest steel maker, plans to double its capacity by 2015, by adding another 35 mt capacity.
• India's largest steel manufacturer SAIL is planning to increase its annual production of 12 mtpa to 24.98 mtpa by 2011-12.
• Sinosteel Corp, China's second- biggest iron ore trader, plans to invest US$ 4 billion to build a 5 mt greenfield steel plant
• Posco which has already started work in Orissa.
PortsVesselsMaterial handling facilitiesRoads
RailwaysRoad – rail
linkagesAncillaries
Trained manpower,
including skilled labour
All resources can be mobilised in the medium term
Except Coking Coal
1 MT of steel will require 0.6 MT of met coke60 MT of coke requirement for 100 MT
Or 100 MT Coking Coal required
Demand from Foundries,Soda Ash plants,Chemical Units
Other Sectors not considered.
Potential sources :
Established : AustraliaCanadaUSAChina
Emerging : MozambiqueIndonesiaSouth African Nations
But Except AustraliaNeed to consider
*ash content,*calorific values,*land locked mines,*transport bottle necks,*freight costs,*law & order problems
India centric issuesPeculiarities of Indian
psycheTendency to buy in the
spot marketDependence on China
Herd mentalityLack of foresight
leading to Inability of ensuring
supply security
In 2004 among the Indian Secondary Steel Producers only Sesa Goa had captive coke
plant (0.28mtpa)
By 2007 more than 10 producers have gone in for captive plants ( 4 mtpa)
(million TPA)2003/04 2006/07
Sesa Kembla Coke 0.28 0.28Sathvahana Ispat 0.12Jindal Vijaynagar 0.80
Lanco Ferro 0.12Electrosteel Castings 0.12Jindal Saw 0.15JSPL 0.80VISA 0.40Neelachal 0.80Jayaswal Neco 0.20
Total 0.28 3.79
JV tie ups:Kalyani Steel with Gujarat NRE 0.32
Captive Coke Plants in Secondary Steel Sector
Which meansDistinct move away from
Chinese dependence : (Coking coal import
preferred over coke import as Chinese prices move
defying logic)
India to emerge as the second largest coke producer after
China
Coking Coal criticality to continue
Expected Indian Coke Consumption & Coking Coal Demand Projections
(Conservatively based on additional 50 million tons of steel by 2012 and further 100 million tons by 2020)
158752721Nett import demand (equivalent coal)
12988Indian coal
170843528Coking coal reqd.
120602521CokeConsumption
2020201220072005year
(million tons)
Australia :Quality mines ready and rolling are hard to come by
Ports are already congestedStiff Mining / Environmental legislation
Mainly in the prospecting license stage
Reserves have to identified and established
Huge investment in infrastructure required
Before mining can actually commence
Mozambique, Botswana, other African sources
Note as opposed to a steel plant being set up in 2-4 years time, setting up a mine will require 6 – 8 years
which means, 10 years to get the coal flow)
Coal Criticality
Coal Videsh(scouting for the last decade)
Gujarat NRE Coke(2 mines in Australia, stake in
NZ mine, other prospecting Co’s)
Tata Steel(Mozambique)
Others
Gujarat NRE Coke Limited
India’s largest independent coke producer(Current capacity – 1 MTPA
By Dec’08 - 1.25 MTPA)
Growth @ speed of thoughtGUJARAT NRE COKE LIMITED
GNCL is the largest independent producer of Metallurgical Coke in India and the
only listed company in this sector with more than 60,000 shareholders
Apr’08 Market Cap US$ 1 billion plus
Profit earning and dividend paying company with strong financials and credit rating
Met Coke capacity 1 million tons & being increased to 1.25 Million MTPA
The only Indian company to have acquired captive coking coal mines outside India –
NRE No. 1 Colliery and NRE Wongawilli Colliery near Wollongong, NSW, (combined
resources more than 550 million tonnes of Hard Coking Coal)
NRE NO 1 IPO for AU $15 million oversubscribed. Currently listed with a market cap
of AU $1 billion – (Gujarat NRE Minerals Ltd – ASX Code:GNM)
Recently acquired Elouera Colliery from BHP Billiton and consolidated with NRE
Avondale. Since renamed as NRE Wongawilli Colliery
A Snapshot
Growth @ speed of thoughtGUJARAT NRE COKE LIMITED
NZ $20 Million invested in Pike River for 400 KTPA of Ultra Low Ash Coal (a much
sought after sweetener for blending with NSW Coal)
Environment friendly Non – recovery Coke batteries with heat recovery and Stamp
Charging facility having ISO 9001:2000 certification
Group has the potential to generate power from waste heat at Re. 0.50 / Unit
Setting up waste heat recovery power plants of 30 MW Capacity by 2009 and further
30MW by 2010.
Setting up Captive Jetty at Bellikeri, Karnataka and Railway Siding at Dharwad which
would improve logistics and reduce cost
Acquiring Six new dry bulk carriers on long term time charters with an option to buy.
To be put in service progressively from 2010 onwards.
Bagged several awards as Super performer, Highest wealth creator, Best Performing
Mid sized company, environment & safety awards by various media houses
A Snapshot Contd…
GUJARAT NRE COKE LIMITEDGrowth @ speed of thought
Shareholding Pattern Jagatramka Family 41%
Mutual Funds & FIIs 41%Indian Public (60,000) 18%
----------100%
Returns to ShareholdersInvestment of Rs. 1 million 1994 equals Rs 0.3 billion in March, 2008Which translates to more than49% YOY growth
• Listed on BSE & NSE• Ticker Code: GUJNRECOKE BSE: 512579• Face Value : Rs. 10 per share
• Shares on Issue- As on 31/3/2007 244 million- On Conversion of warrants 14 million- On Conversion of 1st FCCB issue 48 million- On Conversion of 2nd FCCB issue 25 million
Total as on 31/3/1008 331 million
• Current Market Price Rs. 153 • Fully diluted Market Cap US $1 Billion +
Growth @ speed of thoughtGUJARAT NRE COKE LIMITED
GUJARAT NRE COKE LTDOperations…
HARD COKING COAL (NSW, AUSTRALIA)
RESOURCES 560 MMT
LOW ASH METALLURGICAL COKE
1.25 MMTPA
COAL WASHERYAT KHAMBALIA
& Bachau* (0.75 MTPA each)
Gujarat NRE Minerals (ASX: GNM)
NRE NO. 1 COLLIERY300 MILLION MT
NRE Wongawilli Colliery260 MILLION MT
STEEL UNITTMT BARS : 0.311 MMTPA
*DHARWAD UNIT0. 25 MILLION MTPA
BHACHAU UNIT0.324 MILLION MTPA
KHAMBALIA UNIT0.358 MILLION MTPA
BNCL (60%)DHARWAD UNIT
0. 324 MILLION MTPA
*Proposed Facilities
Waste Heat Recovery Power Plants
Khambhalia* 15 MWBachau* 15 MWDharwad* 30 MW
Total 60 MW
Wind Power 27.5 MWBeing Commissioned 60 MW
Total 87.5 MW
In Australia In India
Cost Sheet of coke making
Coking Coal CIF $300Coke yield at 75% = $400Conversion costs $ 20
---------Coke cost $420
=====Met Coke Price FOB China $ 600
CIF Indian ports $ 660
15%
85%
GUJARAT NRE COKE LIMITEDListed on NSE & BSE in India
Pluton Resources LtdGujarat NRE Limited
Pike River Coal Ltd Rey Resources LtdWonga Coal Pty Ltd
Gujarat NRE FCGL Pty Ltd
Gujarat NRE Minerals Ltd
Listed on ASX:GNM
100%
NRE Wongawilli260 MT
NRE No. 1 300 MT
International Operations
Gujarat NRE Resources NL
Coal mine in New Zealand.
Coal off-take For 400,000MT pa
Exploration tenements
In Australia, Chile & Peru
Exploration tenementsIn Australia
13%
100% 10%
100%
100%
GUJARAT NRE MINERALS LIMITED
Listed on ASXTicker Code: GNMIssue Price $0.50 per share (In July’07)Shares on Issue 801 million
Pre takeover 494 millionIssued against GUJ 188 millionOptions against GUJO 119 million
Current Market Price $1.70Fully diluted Market Cap AUS $1 Billion +
13 million INR unquoted options (50-75 cents and various expiry dates) are not shown above
GUJARAT NRE MINERALS LIMITED
Shareholding Pattern:
Holding Co. 85%Institutions 08%Corporate Bodies 05%Individuals 02%
GUJARAT NRE MINERALS LIMITED
Acquired NRE No.1 Colliery in Dec’04
Production re-started in late 2005 using board & pillar mining
Produced more than 0.8 million tons of coal and exported to India
Four panels in operation in Bulli Seam
One pillar extraction and three development
units – approx 0.6 million tons p.a.Acquired Gujarat NRE Resources, which owns NRE Wongawilli Colliery
Wonga Mains project commenced to access Wongawilli Seam
Working towards producing 4 Mt per annum by 2012
NRE No. 1 Colliery
Location gives access to un congested Port Kembla currently operating at < 50% capacity
NRE No.1 CollieryLocation & Logistics of Mine
Wonga Mains – roadway layout
NRE No.1 Colliery – Wonga Mains Project
Conveyor Portal
• Face advanced to 204 meter mark
• Roof support on “square steel set’s” to 146 m
• Continuous Miner 12CM11 has been removed in preparation for MB670
• Roadway is being concreted
Rubber Tyre Vehicle Portal• Face advanced to 290
meter mark• Fully encapsulated 1.8m
roof bolt support• Mutsui S200
Roadheader in operation
• Intersect “sill” at 230m mark
• Currently cutting over the top of sill in preparation for Drill and Blast
Track “Rail” PortalBulk earth works completedPortal entry formedBatter has been shot crete stabilizedProduction Commenced using 12CM1116 steels stood
Sandvik MB607 Continuous Miner
Arrived on site Wednesday 26th March 2008Site build / commissioning to be completed by early May 2008Risk Assessments and training to be completed early May 2008Underground commissioned mid May 2008
Two Jug-O-0 “LHD” front end loaders have been commissioned
NRE No. 1 Mine NRE No. 1 Mine Resources StatementResources Statement
113.79
71.97
28.71
13.11
Inferred (mt)Seam Measured (mt)
Indicated (mt) Total (mt)
Bulli 1.5 56.16 70.77
Balgownie 49.99 78.70
Wongawilli 102.65 174.62
TOTAL 1.5 208.8 324.09
Production PlansProduction Plans
Modern Modern LongwallLongwall MineMine–– New coal clearance infrastructureNew coal clearance infrastructure–– 3500 3500 tphtph capacity LWcapacity LW–– New CM fleet etcNew CM fleet etc
Target Operating costs < $30/t RWCTarget Operating costs < $30/t RWC
Year Ending
RWC (mt)
Mar 09 0.8
Mar 10 0.9
Mar 11 1.3
Mar 12 2.6
Mar 13 3.8
Capital InvestmentCapital InvestmentCapital InvestmentCapital Investment
–– Very low capital cost required to fully develop the mineVery low capital cost required to fully develop the mine–– $311 M will result in > 4mtpa capacity mine$311 M will result in > 4mtpa capacity mine
Current StatusCurrent Status–– Wonga Mains commencedWonga Mains commenced–– New CM on surfaceNew CM on surface–– Finalizing new belt contractFinalizing new belt contract
Item Amount ($M)
Wonga Mains 101
Longwall 110
Washery etc 43
Miners etc 32
TOTAL 311
GeneralGeneral
Known geologyKnown geologyPremium Hard Coking Coal Premium Hard Coking Coal GeotechGeotech issues mining under old workings. issues mining under old workings. Local experience available. Reports being Local experience available. Reports being done.done.Increased CH4 levels to the West Increased CH4 levels to the West –– gas gas drainage planned.drainage planned.No Spontaneous CombustionNo Spontaneous Combustion
Gujarat NRE MineralsGujarat NRE Minerals
Readying to Ride the Road to Prosperity
• Acquired Elouera from BHP Billiton in December 2007
• Consolidated with NRE Avondale
• Consolidated Colliery re-named as NRE Wongawilli Colliery
• Development commenced in Feb 2008
• Longwall operations to commence in April 2009
• Mine is currently in production
GUJARAT NRE MINERALS LIMITED
NRE Wongawilli Colliery
SurfaceCoal Handling Facilities - Railway, Bins, Stockpile, Decline Conveyor ,
Bathhouse, offices and car parking
UndergroundLongwall, coal clearance, development equipment, transport fleet
Infrastructure
NRE Wongawilli Colliery
Location & Logistics of Mine
NRE AVONDALE
Huntley
Colliery
NRE WongawilliColliery
NRE Wongawilli Colliery
(Old Avondale)
(Old Elouera)
NRE Wongawilli Mine NRE Wongawilli Mine Resources StatementResources Statement
213
74
114
25
Inferred (mt)Seam Measured (mt) Indicated (mt) Total (mt)
Bulli 8 33
Wongawilli 21 16 151
Tongarra 74
TOTAL 21 24 258
Mine layout and LW11 blockMine layout and LW11 block
BulliBulli Seam ExtractionSeam Extraction
Production PlansProduction Plans
Year Ending RWC (mt)
Mar 09 0.3
Mar 10 1.64
Mar 11 1.77
Mar 12 1.51
Mar 13 2.25
•Development for LW 11 commenced Feb 08.
•LW11 due to commence mid 09.
•2nd CM due to start Q3’08
Capital InvestmentCapital InvestmentCapital Investment (based on concept plan)Capital Investment (based on concept plan)
–– Very low capital cost required to fully develop the mineVery low capital cost required to fully develop the mine–– $175 M will result in > 4mtpa capacity mine$175 M will result in > 4mtpa capacity mine
Current StatusCurrent Status–– Planning CommencingPlanning Commencing Item Amount ($M)
Drifts 20
Longwall 35
Washery etc 37
Miners etc 31
Shafts 30
TOTAL 175
GeneralGeneral
PriorityPriority–– ExplorationExploration–– Detail mine planningDetail mine planningGeotechGeotech very goodvery goodNo gas or spontaneous combustionNo gas or spontaneous combustionLimitations due to damsLimitations due to dams
PKCTPKCTLogisticsLogistics
–– 1515--20 km transport distance20 km transport distance
–– NRE No. 1 MineNRE No. 1 MineTrucks at presentTrucks at presentHave hauled to 3 Have hauled to 3 mtpamtpa
–– WongawilliWongawilliRailRailHave hauled to 2 Have hauled to 2 mtpamtpa
PKCTPKCT–– Surplus capacitySurplus capacity–– FY08 13mt exportFY08 13mt export–– Capacity 18 MT Capacity 18 MT –– Primary Bottleneck is on the stockyardPrimary Bottleneck is on the stockyard–– Study underway now to increase capacityStudy underway now to increase capacity
ApprovalsApprovals
PART 3A process commencedPART 3A process commenced
Primary IssuesPrimary Issues
–– Urban communitiesUrban communitiesTransportTransportStockpilesStockpilesWasheriesWasheries & emplacement& emplacement
–– Subsidence ImpactsSubsidence ImpactsSouthern Coalfields inquirySouthern Coalfields inquiryNon aggressive Non aggressive longwalllongwall extraction planextraction planAvoided major creeks and damsAvoided major creeks and dams
SummarySummary
Production underway at both minesProduction underway at both minesPlan optimizing yet to be conducted Plan optimizing yet to be conducted –– hence upside potential.hence upside potential.LabourLabour available in tight marketavailable in tight marketLow overheads Low overheads –– small flexible companysmall flexible companyNo marketing costsNo marketing costsVery close to an unconstrained portVery close to an unconstrained portSubstantial resource base in both mines of Pure Hard Coking CoalSpread out risk with 2 mines in the same area
Gujarat NRE Minerals LtdGujarat NRE Minerals LtdRaw Coal Production Profile Raw Coal Production Profile
0
1
2
3
4
5
6
7
Mar'09 Mar'11 Mar'13
No. 1WongawilliTotal
Thank You
Work hardDon’t compromiseTake calculated RisksCreate WealthShare : “Tera Tujhko Arpan / keya lage mera?”Be responsible for your actions(especially to the environment)
Our philosophy