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Ubs pactual presentation
1. Brazil 2008 -- UBS Pactual Ninth Annual CEO Conference
Brazil 2008 UBS Pactual Ninth Annual CEO Conference
February 2008
February 2008
1
2. Disclaimer
This presentation relating to MPX Energia S.A. (“MPX”) includes “forward-looking statements”, as that term is defined in the
Private Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed
forward-looking statements and are often characterized by the use of words such as “projects”, “expects”, “anticipates”,
“intends”, “plans”, “believes”, “estimates”, “may”, “will”, or “intends”, or by discussions or comments about our objectives,
strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our
operating capacity, operating expenditures, capital expenditures and start-up dates.
By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both
general and specific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or
developments described in such statements may not be indicative of results or developments in future periods. We caution
participants of this presentation not to place undue reliance on these forward-looking statements as a number of factors
could cause future results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory
approvals on a timely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological
resources into mineral reserves, and changes in economic, political and regulatory conditions. We caution that the foregoing
list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider
these factors as well as other uncertainties and events.
MPX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an
offer to sell (which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any
securities in the United States, or any other jurisdiction. The securities referred to herein have not been registered in any
jurisdiction, and in particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state
securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such
registration requirements.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole
or in part without MPX’s prior written consent.
2
3. EBX Holding Structure
XHOW
MMX LLX OGX AMX REX
PFX
Mining Logistic Energy Oil & Gas Renewables Real Estate Entertaiment
• Amapá • Açu Port • Coal Fired Power Plants • Water • MDX Day • Mr. Lam
System MPX Pecém Exploration Hospital
• Brasil Port Termomaranhão • Pink Fleet
• Corumbá Porto do Açú • Forests • Santa
System Castilla Sustainable Teresa
Handling Residence
Seival II
• Minas-Rio • Diesel / Fuel Oil Power Plants
System Serra do Navio • La Cañada
de Pillar
• Natural Gas Power Plants
Termopantanal
• Hacienda
• Small Hydro Power Plant (PCH) Castilla
Capivara
• Hydro Power Plant (UEH)
Baixo Iguaçú
• Seival Coal Mine
• New Coal Mines Developments
3
4. MPX Ownership Structure
Controlling Shareholder Free Float
76% 24%
Market Capitalization1
US$ 3.2 billion
Power Generation
Power Generation Coal Supply
Coal Supply Power Marketing
Power Marketing
51.0% 99.9% 70.0% 50.0% 67.0% 99.9% 70.0% 70.0% 99.9%
Energy Trading
Amapari Energia Seival II Porto do Açu Pecém Termopantanal Termomaranhão Castilla Seival Mine
Co
Partners Partners Partners Partners Partners Partners
49% Eletronorte 30% Centennial 50% EDP 33% Coop. Rural 30% Centennial 30% Copelmi
de Electrificacion
1 – As of February, 1st, 2008
4
5. Why investing in the power sector?
Brazil is likely to experience an energy shortage in the near future
Supply & Demand Forecast (Avg. GW) Demand Evolution (Volume)
.5% 3% 6%
75 =4 15%
GR
d CA ar)
23% 27%
an ye
70
De
m GW
(~3
65
Avg. GW
60 97% 94%
85%
77% 73%
55
50
45
2007 2008 2009 2010 2011 2012 2013 2014 2002 2003 2004 2005 2006*
Existent / Under Construction Auction for New Energy
Regulated (ACR) Free Market (ACL)
MPX Portfolio Energy Demand
Source: PSR Report Source: PSR Report
Note: (*) Until September
____________________
Source: PSR
MPX planned capacity will start to kick-in right in the beginning of the most critical period
MPX planned capacity will start to kick-in right in the beginning of the most critical period
5
6. Generation Expansion Alternatives
Nowadays, the traditional energy sources in Brazil are dealing with implementation
difficulties...
• Increasing environmental licensing difficulties
Hydro • New projects mainly in the Amazon region
• Limited reservoirs
• Natural gas deficit
• Single supplier
Natural Gas • High LNG prices
• Excessive penalty associated to fuel unavailability
• Important complementary source
Alternative Sources • High price
• Low associated energy
... presenting the following structuring alternatives
• Government projects
Nuclear / Structuring
• Political risk
Projects • Challenges for implementation
• Abundant reserves
Coal Thermal Plants • Highly traded
• Located in areas of relatively low geopolitical risk
6
7. Coal Thermal Plants using Clean Coal Technology
MPX´s projects will use Clean Coal Technology
This technology controls the emissions during
the coal combustion:
Reduction of NOx using Low NOx Burner and
“Over fire Air“
Reduction of SOx through the installation of a
FGD – Fuel Gas Desulfurization
Reduction by 99.99% of particulate material
Clean Coal Technology also aim to improve
the efficiency of a power plant, leading to a
reduction in fuel consumption and overall
emissions
Source: EDP – UTE Edes/POR - CCT
7
8. Main Projects
PCH Capivara UTE Serra do Navio
(30 MW) (23 MW)
UTE Termomaranhão
(720 MW)
UTE MPX (Pecém)
(1,080 MW)
UTE Termopantanal
(44 MW)
UTE Porto do Açú
UTE Castilla (5,400 MW)
(1,400 MW)
UTE Seival II & Seival Coal Mine
(600 MW)
UHE Baixo Iguacu
(350 MW) Size (MW) MPX (MW)
Coal 9,200 6,800
Hydro 380 260
Natural Gas 44 29
Diesel 23 12
9,647 7,101
8
9. Generation Ramp-Up
MPX will be a leading integrated energy generation player through 9 plants and at least
2 Coal mines (additional developments expected)
9.6
Total Capacity (GW)
8.6
Capacity Addition (GW) per year
2005 2006 2007 2008 2009 7.6 2010 2011
Capacity MPX (GW)
6.6
Capacity Addition MPX (GW)
5.6
Coal Assets
5.0
7.1
2.6 2.5 6.4
5.7
5.0
1.4 4.3
1.2 1.2 3.7 1.0 1.0 1.0 1.0
1.9 0.6
1.8
0.8 0.8 1.0 0.6 0.7 0.7 0.7 0.7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Serra do Navio Mozambique Pecém (Coal) Açu Plant Pecém (Coal) UTE Seival II
Açu Plant (Coal)
(Diesel) coal mine (Coal) (Coal)
Estimate of 3mtpy
Termomaranhão Castilla (Coal) Termomaranhão
(Coal) (Coal)
PCH Capivara Açu Plant
(Hydro) (Coal)
Termopantanal Castilla
(Natural Gas) (Coal)
Seival Mine Baixo IguAçu
Up to 14mtpy (Hydro)
57% of the Output Energy until 20121 with Contracts being finalized
57% of the Output Energy until 20121 with Contracts being finalized
Note: 1- Phase I comprised of projects starting before 2012
9
10. Competitive Advantages
Superior infrastructure strategically located and integrated with Super Ports
Coal Supply: Colombia
Brazilian Existing Port Facilities
Limited draft (between 10-12m) makes it difficult to
Porto do Itaqui
berth large vassels in Paranaguá, Rio de Janeiro,
Porto do Pecém Vitória and Vilha Velha
Limited back areas for implementation of projects
Suape
Surrounded by urban areas
Salvador
Ports Hosting MPX Projects
Vitória &
Chile Vila Velha
Porto do Açu World class, state-of-the-art port design and systems
Porto Rio de Janeiro
Santos
Paranaguá Deep drafts, more than 15m, with limited need for
Itajaí dredging and capable of berthing Cape Size vessels
Port in
Coal Supply:
Punta Cachos
Mozambique, Indonesia Superiorly structured to receive bulk cargos
Rio Grande or South Africa
Large land holdings for adjacent industrial complexes
Coal Supply:
Australia Complies with International Ship and Port Facility
Security Code regulations
10
12. Porto do Açú - Coal Fired Power Plant
Location: Porto do Açú, Rio de Janeiro
State
Shareholders: 70%
30% future strategic partner
UTE Porto do Açú
(5,400 MW)
Fuel: Coal (imported)
Submarket: SE
First Phase: Second Phase:
Capacity: 1,400 MW (2x700 MW) Capacity: 4,000 MW
Environmental Process: started on Environmental Process: will start on
August/2007 January/2009.
Project site acquired CAPEX: US$ 8.2 Billions
CAPEX: US$ 2.7 Billions Start Up Operation – 2015 (1000 MW / year
until 2018)
Start Up Operation – Jul-2012
Off Taker: Free Market (ACL) & Regulated
Off Taker: Free Market (ACL) Market (CCEAR)
12
13. Castilla – Coal Fired Power Plant
Capacity: 1,400 MW (4 x 350 MW)
Fuel: Coal (imported)
Location: 3rd Region, near Copiapó City
Shareholder: 70%
UTE Castilla
(1,400 MW) 30% future strategic partner
Environmental Process: started on September/2007
Feasibility Study started on August/2007
CAPEX: US$ 2.7 Billions
Start Up Operation: Jul-2012
13
14. Pecém - Coal Fired Power Plant
Location: Ceará State, Pecém Port.
UTE MPX (Pecém)
(1,080 MW) Shareholder: 50%
50%
Fuel: Coal (imported)
Submarket: NE
First Phase: Second Phase (100% MPX):
Capacity: 720 MW (2 x 360 MW) Capacity: 360 MW
Environmental Process: LI Issued Environmental Process: starts on january/2008
CAPEX: US$ 1.2 Billions CAPEX: US$ 0.7 Billion
Start Up Operation – 2011 Start Up Operation – 2013
Off Taker: Regulated Market (CCEAR) and Off Taker: Regulated Market (CCEAR) and Free
Free Market (ACL) Market (ACL)
14
15. Termomaranhão – Coal Fired Power Plant
UTE Termomaranhão Location: Maranhão State, near Itaqui Port.
(720 MW)
Shareholder: 100%
Fuel: Coal (imported)
Submarket: N
First Phase: Second Phase:
Capacity: 360 MW Capacity: 360 MW
Environmental Process: with Previous Environmental Process: starts on january/2008.
License
CAPEX: US$ 0.7 Billion
CAPEX: US$ 0.7 Billion
Start Up Operation – 2013
Start Up Operation – 2011
Off Taker: Regulated Market (CCEAR) and Free
Off Taker: Regulated Market (CCEAR) and Market (ACL)
Free Market (ACL)
15
16. Main Risks and Mitigants
MPX has addressed all critical elements to become the largest private and integrated
player in the Brazilian power sector
Environmental Permits Secured Fuel Supply
EBX group successful track record Seival Mine + AMCI Group agreement
Highest environmental standards Coal is an abundant resource
– “Clean Coal Technology” Backhaul from iron ore exports
– World Bank / Equator principles
5 projects already with environmental permits
Energy Placement Significant Secured Debt Financing
Execution Risk
Pecém and Termomaranhão 100% sold Mitigants Pecém and Termomaranhão secured
Anchor off-taking in final negotiations Porto do Açu: US$1bn firm commitment
Supply & demand imbalance BNDES support for infrastructure
Unregulated markets willing to secure long MLAs/ECAs aggressive funding
term energy supply
Currency, Commodity, Interest Rates
Construction Management Risks
EPC lump sum and turn key Pass-through of fuel costs in the
Performance bonds and completion guarantees regulated market
Proven technology, widely used Own coal mines for coal supply for free
market
EBX track record (Termoceará)
BNDES Debt: stable and low interest
Management expertise
rates
16
17. Management and Board
MPX has a high skilled, experienced and qualified management…
Management Other Board Members
Name / Position Board Members
Founder and CEO of EBX Group, entrepreneurial conglomerate
Eike Batista (50) founded in 1983 Eliezer Batista da Silva
Chairman and Founder Luiz Rodolfo Landim Machado
Marcelo Cheniaux
Former Petrobras Senior Manager, El Paso CEO and Rio
Eduardo Karrer (46) Polímeros CEO Flavio Godinho
25 years of experience in the energy sector
CEO Raphael de Almeida Magalhães
Civil Engineer
Former Rio Polimeros Industrial Director
Marcus Temke (45) 23 years implementing and operating industrial plants Independent Board Members
Worked with Degussa (Germany), Sandoz and Rio Polimeros
COO
Chemical Engineer Luiz do Amaral de França Pereira
Former Director of Enersul and Termoceará Rodolpho Tourinho Neto
Paulo Monteiro (50) 25 years of experience in the energy sector
Business Development Electrical Engineer Samir Zraick
Former Unisys CFO (Brazil & Germany), Arco Petroleum
Rudolph Ihns (50) Products Director (Brazil & USA) and MMX CFO Senior Advisor
25 years of experience in the financial area
CFO
Mechanical Engineer Francisco Gros
Xisto Vieira Filho (64) Former Eletrobras Director, El Paso Senior VP and Secretary of
Energy in the Brazilian Government
Power Marketing & 35 years of experience in the energy sector
Regulation Director Electrical Engineer
Former partner of Villemor Amaral Advogados, law firm
Bruno Chevalier (43) Former legal director for Delphi Automotive Systems, and legal
manager in General Motors (Lisbon) and MMX
Legal Director
Lawyer graduation and LLM for Queen Mary College
… combined to a board with a unique track record
17
18. Environmental Excellence
“Conciliate economic development with nature preservation”
Brazil has unique conditions to support CO2 emissions
Land availability
Water
Climate Conditions
EBX has expertise in managing the environment
MPX will invest up to US$30 million a year in environment preservation
Eliezer Batista Natural Reserve:
Eliezer Batista Natural Reserve:
50 thousand acres in the most
50 thousand acres in the most … MMX already excels in
… MMX already excels in … and Company already
… and Company already
preserved area in South Pantanal, …
preserved area in SouthPantanal, …
Pantanal, reforesting…
reforesting…
reforesting… envisioning new technologies
envisioning new technologies
18
19. To sum up…
Leading
power generation
company
Strategic Superior
partnerships power assets
Experienced Uniquely positioned
management & to capture
proven track record market growth
19
