Vedanta Resources Plc India Operations Site Visit: Corporate Presentation

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Vedanta Resources Plc India Operations Site Visit: Corporate Presentation

  1. 1. VEDANTA RESOURCES PLCIndia Operations Site Visit: Corporate Presentation 24 SEPTEMBER 2012
  2. 2. Cautionary Statement and DisclaimerThe views expressed here may contain information derived from publicly available sources that have not beenindependently verified.No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of thisinformation. Any forward looking information in this presentation including, without limitation, any tables, chartsand/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. Thispresentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta").Past performance of Vedanta cannot be relied upon as a guide to future performance.This presentation contains forward-looking statements – that is, statements related to future, not past, events. Inthis context, forward-looking statements often address our expected future business and financial performance,and often contain words such as expects, anticipates, intends, plans, believes, seeks, or will. Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertaintiesarise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations ininterest and or exchange rates and metal prices; from future integration of acquired businesses; and fromnumerous other matters of national, regional and global scale, including those of a environmental, climatic, natural,political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual futureresults to be materially different that those expressed in our forward-looking statements. We do not undertake toupdate our forward-looking statements.This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation ofan offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or anyof its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shallthis presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connectionwith, any contract or investment decision.FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 2
  3. 3. Agenda Overview Navin Agarwal, Deputy Executive Chairman Vedanta Market Positioning M.S. Mehta, Chief Executive Officer Business and Operations Financials D.D. Jalan, Chief Financial Officer Sustainable Development Tony Henshaw, Chief Sustainability OfficerFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 3
  4. 4. Site Visit ItineraryTuesday - 25 September India Operations Site Visit1. Jharsuguda Aluminium S.K. Roongta and Power plants CEO, Aluminium and Power Zinc-Lead-Silver • Rampura Agucha mine • Dariba smelters • Sindesar Khurd mineWednesday - 26 September2. Rampura Agucha mine Akhilesh Joshi CEO, Hindustan Zinc 3 Agucha, Dariba smelters Barmer Zinc India 2 Dariba, Sindesar Khurd Sindesar Khurd mine Oil & Gas • Rajasthan Jharsuguda 1 PowerThursday - 27 September Mumbai • Jharsuguda power3. Rajasthan (Mangala) P. Elango Interim CEO, Cairn India 4 Aluminium oil fields • Jharsuguda smelter Oil & Gas Goa Iron Ore • GoaFriday - 28 September P. K. Mukherjee4. Goa Iron ore mines CEO, Sesa Goa Iron OreFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 4
  5. 5. Overview Navin AgarwalDeputy Executive Chairman
  6. 6. Highlights Vedanta: A Global Diversified Natural Resources Major World-class portfolio of large, structurally low-cost, scalable assets with long life of R&R Strong financial profile supported by diversified cash flow growth Delivering industry-leading production growth driven by substantially invested projects Recent acquisitions provide additional growth options EBITDA (US$mn) Free Cash Flow (US$mn) Underlying EPS (USc/share) +42% CAGR +32% CAGR +29% CAGR 5,353 3,128 209 323 335 27 FY2004 FY2012 FY2004 FY2012 FY2004 FY2012 proforma proforma proformaNote: FY2012 numbers are proforma with Cairn India for full yearFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 6
  7. 7. Strategic Priorities Deliver industry-leading production growth across our portfolio Continue to add reserves and resources to drive long-term value Complete the simplification of the Group structure Minority buyouts at HZL and BALCO Reduce gearing from free cash flow Growth and Long-Term Value Creation with a Focus on SustainabilityFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 7
  8. 8. Optimising Group StructureRestructuring on track for completion in CY2012 Consolidates and simplifies group structure, Vedanta Resources eliminates cross-holdings Financial Benefits: − Delivers significant synergies upto $200mn/yr 79.4% 58.3% − Improves capital structure Konkola − Improves allocation and cost of capital Copper Sesa Sterlite Mines − Enhances fungibility of cash − Enhances visibility of earnings and cash flows Reduces Debt service liability at plc by 61% to $3.9bnMinority Buyouts Buyout of government stake in HZL and BALCO Zinc- remains a priority Iron Alumi- Lead- Oil & Gas Copper Power Ore nium Silver HZL Sesa Goa Cairn Tuticorin BALCO Talwandi India Sabo Zinc Int’l WCL CMT VAL Jharsuguda BALCONote: Shareholding based on basic shares outstanding MALCOFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 8
  9. 9. Tier-1 Diversified Asset Portfolio FY2012 Target Production Capacity R&R Life1 Sustainable Cost Position2 Zinc India 830kt 1mtpa 25+ Lowest Quartile 3 Zinc Intl. 444kt 400ktpa 20+ Lower Half Silver 7.8moz 16mozpa 25+ By-product 4 Oil & Gas 173kboepd 260kboepd 17 Lowest Quartile 4 5 Iron Ore5 13.8mt 20.5mtpa 18 Lowest Quartile 6 Copper Zambia 200kt 400ktpa 24+ Lower Half Currently Lower Half; Lowest Aluminium 675kt 2.3mtpa Quartile with Captive Bauxite Large, Low-Cost, Long-Life, Scalable AssetsNote: 1. At capacity 2. Cost position for base metals from Wood-Mackenzie, Iron ore from Metalytics ,and Oil & Gas from Company Study 3. Includes Gamsberg 4. For current producing assets, subject to approvals 5. Does not include Liberia 6. Mine life of Konkola DeepsFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 9
  10. 10. A Global Diversified Natural Resources MajorTop Global Diversified Natural Resources Companies FY12/CY11 PE EBITDA Multiple ($bn) 2% 23% 52% 15% 10% BHP Billiton 33.7 9.9 2% 98% Vale 33.8 5.8 Rio Tinto 28.5 7.8 69% 17% 4% 14% Anglo American 13.3 9.7 37% 28% 15% 6% 21% 2% Xstrata 11.6 11.2 10% 46% 7% 33% Teck 5.5 9.6 16% 36% 48% 2% Vedanta 5.3 5.0 38% 30% 13% 13% 3% ENRC 3.4 6.9 37% 6% 46% 11% O&G Zinc-lead Iron ore¹ Copper Base metals² Coal Aluminium Ferroalloys Other Scale and DiversificationSource: Company filings and broker reports. PE multiples based on BEST next year PE estimate from Bloomberg as of 14 September 2012. Vedanta numbers are proforma with Cairn India for full year FY2012.Note: Commodity split based on pro forma EBITDA for Vedanta and EBIT for major diversified mining companies.1. For Vale, Iron ore includes all ferrous metals2. For BHP, base metals includes copper and zinc-lead. For Xstrata, base metals includes nickel.FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 10
  11. 11. Strong and Consistent ProfitabilityConsistent Profit Margins FY2012 EBITDA Margins by Segment Share of EBITDA Group EBITDA margin¹ Average LMEX Oil & Gas² 56% 18% 59% 55% Zinc- India 54% 31% Iron Ore 43% 18% 45% 43% 41% 41% Zinc- International 41% 9% 35% 33% 33% 3,756 Copper Australia 30% 2% Power 27% 3% Copper Zambia 23% 10% 1,636 Aluminium 10% 4% 1 Group 41% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Profitability driven by Asset Quality and DiversificationNotes: 1. Excludes copper custom smelting operations 2. Oil and Gas EBITDA margins have been calculated after adding back Rajasthan royalties and profit sharing with government to revenues. EBITDA margin based on reported revenues was 81%.FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 11
  12. 12. Well-Invested Capex Driving Near-Term GrowthCash Flow and Growth Capex Profile - $bn Year-end Capacity (in Copper Equivalent kt)3 Free Cash Flow¹ Capex-ex-Cairn Capex-Cairn² Zinc-Lead Silver Iron Ore Copper Aluminium Power Oil & Gas 4,000 3,500 3,000 0.5 1.6 2,500 2,000 3.7 0.4 3.1 - 1,500 2.5 2.3 2.2 1,000 1.8 1.7 1.5 1.3 500 0FY2010 FY2011 Proforma FY2013e FY2014e FY2015e FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY2012 Free Cash Flow at an Inflection PointNotes: 1. Free cash flow after Sustaining Capex but before Growth Capex 2. Capex net to Cairn India; part of FY2014e capex is subject to Government of India approval; FY2015e capex has not been announced. Shaded portions pertain to growth not reflected in the RHS capacity growth chart. 3. All metal and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using Long Term commodity price estimates. Power rebased using FY2012 Realisations. Copper custom smelting capacities rebased at TC/RC for FY2012FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 12
  13. 13. Vedanta Market Positioning M.S. Mehta Chief Executive Officer
  14. 14. Resourcing IndiaZinc Consumption Estimates – India and China Aluminium Consumption Estimates – India and ChinaAnnual demand in mn tonnes Annual demand in mn tonnes Size of bubble indicates 54% Size of bubble indicates 53% % of world consumption 100 % of world consumption 16.4 40% (logarithmic scale) (logarithmic scale) 41% 8.2 4.1 7% 7% 10 2.0 1.0 5% 4% 0.5 0.3 1 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030India R&R and Consumption: India and World Strong demographics and urbanization driving metal 31 consumption growth 634 Abundant reserves to support further domestic 3,305 production 2,004 Vedanta uniquely positioned as domestic suppluer of key commodities Zinc R&R (mt) Zn Consumption Bauxite R&R (mt) Al Consumption 2012e (kt) 2012e (kt)Note: Source: Wood Mackenzie for metal consumption 1. Commodity data represents Total estimated Reserves and Resources based upon public sources including GSI, GOI, Brook Hunt, UNFC, IBM, and E&Y.FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 14
  15. 15. Proximity to Rapidly Growing Markets Vedanta Revenues by Geography Strong Market Positioning in India FY2012 FY2012 India Market Shares Rest of the World 12% #1 #1 #1 #1 #1 #2 Middle East and Africa 9% 82% India Other Far 48% East and Asia 11% China 20% India Operations: Domestic Sales as % of Total Sales FY2012 2010-25 India Consumption CAGR % 39% 6% 5% 10% 8% 9% 10% 4% 33% 30% 100% 100% 81% 80% 62% 58% 19% 6% 5% Zinc India Zinc India Silver Copper Aluminium Iron Ore Oil and Zinc Lead Silver Copper Aluminium Oil - Zinc - Lead India GasNote: Consumption CAGR over 2010-25 for base metals as per Wood-Mackenzie estimates. For Iron Ore, steel consumption CAGR over FY2012-17 as per Ministry of Steel, India considered. Silver consumption growth rate over 2012-2025 as per Ministry of Mines, India. Notes: Rank excludes imports. Oil & Gas production numbers considered instead of sales. Oil & Gas consumption growth rate over 2008-2035 as per EIA. Source: Wood Mackenzie, Indian Ministry of Petroleum and Natural Gas, IBIS, company sources FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 15
  16. 16. Strong Presence in India and Africa India Africa Largest diversified resources major in India Largest zinc producer in Africa Largest producer of Aluminium, Copper, Operations Among top 3 copper producers Zinc, Lead, Silver Large iron ore assets in Liberia 2nd largest crude oil producer $2.5bn in Zambia Overseas Capital c.$12.5bn across various segments Two large projects – Liberia iron ore and Invested Gamsberg zinc deposit Contribution to Among the largest: c.$4.8bn in proforma Largest in Zambia Exchequer FY2012 (incl $2.8bn by Cairn India) Contribution to Community programmes benefiting 2.8mn Community programmes benefiting Society people across 1006 villages 150,000 people across 3 countries Employees Largest employer in several states Largest private-sector employer in ZambiaFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 16
  17. 17. Business and Operations M.S. Mehta Chief Executive Officer
  18. 18. Delivering GrowthColor KeyGroupZinc-LeadCopperAluminiumPower FY2010 FY2012 FYIron Ore Acq VS Dempo 2012Oil and Gas Group Structure Cmd KDMP Mid-shaft loading Simplification ancd FY Acq Cairn India Cmd 210kt Zn smelter 2011 Exp RA mine to 6mt Acq Liberia iron ore assets FY2011 Cmd 350t Ag refinery FY2004 FY2008 Acq Zinc Intl FY Cmd 100kt Dariba Pb Ancd 1mt Cmd 170kt Zn 2010 Cmd 1.5mt mill at smelter alumina refinery smelter silver-rich SK mine Cmd 7.5mt Nchanga East project at VAL Cmd 80MW CPP at Cmd 2,400 MW mill FY2006 Chanderiya Jharsuguda powerPre-IPO FY Dbn TLP to 75kt Cmd 170kt Zn and 2009 1997: Cmd 50kt Pb smelter, Cmd 2nd Co furnace FY2009 Tuticorin smelter 154MW CPP Exp 274MW wind power FY Exp RA mine to 5mt 1999: Acq Exp Tuticorin 2008 FY2005 Australia Cu mines smelter to 300kt Cmd 311kt Nchanga Acq KCM FY smelter, 6mt Konkola 2001 – Acq BALCO 2007 Concentrator KDMP project 2002- Acq HZL launched FY First metal at 500kt VAL 2006 Jharsuguda aluminium FY FY2007 smelter 2005 Abbreviations: FY Acq Sesa Goa Dbn: Debottlenecked Pre- 2004 Exp: Expanded IPO Cmd 245kt Al smelter and 540 Cmd: Commissioned Vedanta IPO MW CPP at BALCO Ancd: Announced Acq: Acquired Dbn Tuticorin smelter to 400ktFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 18
  19. 19. Continued Growth and Diversification FY2004 Proforma FY2012 FY2011 (IPO) with Cairn India for Full Year Power Aluminium 2% 3% Oil & Gas Power Aluminium Copper 38% 4% 7% 13% Copper Iron Ore 19% Aluminium 33% 16% Copper 29% Zinc India 55% Zinc-Int. Zinc India Zinc India 3% 34% 23% Iron Ore Zinc-Int. 14% 7% EBITDA: $323mn EBITDA: $3.6 bn EBITDA: $5.4bn +10x +16xFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 19
  20. 20. Oil and GasAchieved Rajasthan Gross Production (bopd) Rajasthan block producing at c.175kbopd − 7.3bn boe of estimated gross in-place resources Exploration success ratio c.50% − FY2012 R&R replacement ratio of 175% − Exploration success at Sri Lanka, KG BasinFocus Significant 300,0001 Rajasthan Block Ramp-up1 part of Basin 240,0001 Potential − Pipeline debottlenecking and augmentation in CY2013 Barmer Hill − Development - Bhagyam, Aishwariya; EOR pilot Primarily Further c.175,000 from MBA Currently exploration − 300kbopd basin production potential Aishwariya Mangala towards Exploration – 10 blocks in diverse basins c.150kbopd 125,000 at end FY2013 South Africa JV: c.20,000 sq km in geologically Acquisition Bhagyam completion upto proven basin2 40kbopd Mangala 125kbopdNotes. 1. Subject to approvals 2. Closure of transaction is subject to South African regulatory approvalsFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 20
  21. 21. Zinc IndiaAchieved Refined Zinc – Lowest Quartile Cost Position 5,000 Organic growth: 1mtpa zinc-lead, 16moz silver Zn Composite cost - c1 cash 4,000 Sustained lowest quartile cost position cost ($/t) 3,000 25+year mine life with 10%+ grades 2,000 1,000 HZLFocus ($ 342/t)1 0 Operational efficiency and capacity utilization 25% 50% 75% Cumulative Production (Percentile) − Significant near term upside in silver and lead Source: Wood-Mackenzie for Zinc C1 cost curve; 1 Zinc India FY2012 COP of $342/t calculated as per Wood-Mackenzie methodology. Zinc India remains in the First Quartile based on reported FY2012 COP of $834/t, which does not consider credits for silver and lead. Continue to add more R&R than depletion at existing Operating Performance mines Zinc-Lead Metal Production (kt) kt Zinc reported COP excluding royalty ($/t) $/t Zinc LME ($/t) Additionally, large-scale exploration across India 1000 4,000 900 3,500 covering over 20,000 sq km 800 3,000 700 Feasibility study underway for next leg of growth 600 2,500 500 2,000 400 1,500 300 1,000 200 100 500 0 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 21
  22. 22. Zinc InternationalAchieved 2012e Production (kt) Mine Life Business acquired in FY2011, stable operating Rampura-Agucha 710 25+ performance Red Dog Century R&R: Mine life extended at all three assets Mount Isa Pb/Zn San Cristobal AntaminaFocus Brunswick Further mine life extension at existing operations McArthur River Tara Gamsberg project (186mt) Penasquito − 20 year mine life at 400ktpa zinc production Vazante Lanping − Feasibility study to complete in current quarter Lisheen 168 − Targeting production in 2 years Skorpion 164 Gamsberg… 400 20+ 0 500 1000 Source: Wood-MackenzieFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 22
  23. 23. Iron OreAchieved Vedanta Liberia Iron Ore Significant expansion since acquisition Asset Type R&R Mano River Brownfield 80 mt Sustained lowest quartile cost position Bea Mountain Greenfield 923 mt R&R: 68mt net addition in FY2012 Bomi Hills Brownfield 50 mt Distance 0 50 100 − 374mt total R&R, implying 18+ year mine life1 key(km) Liberia iron ore assets acquired: Liberia − Aeromagnetic study and initial drilling indicates Vedanta Mount Nimba (ArcelorMittal) significant upside to the resource base estimate Mano River of 1bn tonnes Bea Mountain Bomi Hills Proposed SimandouFocus Bong Railway Robertsport (Wuhan Monrovia Steel) India Putu Buchanan (Severstal) − Goa: Expanding roads and developing new corridors to mitigate logistics bottlenecks Dida Asset Key Greenville − Karnataka: Process underway to resume mining Major Roads Railway Other Iron Ore Mines Liberia Western Cluster Mines − First shipment in FY2014Note: 1. At capacity for current producing assets, subject to approvals; Does not include LiberiaFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 23
  24. 24. Copper India/AustraliaAchieved Lowest Quartile Cost Position 50 Cu smelting net cash conversion cost One of the most efficient copper smelters globally 40 − Sustained lowest quartile cost position 30 Value addition into copper rods, c.50% in FY12 (c/lb) 20 98%+ copper recovery and efficient by-product Copper India 10 (0 c/lb) management 0 -10 25% 50% 75%Focus Cumulative Production (Percentile) Source: Wood-Mackenzie for Copper Smelting cash cost curve, FY2012 reported net COP for Copper India Commissioning of 160 MW CPP Operating Performance 400kt smelter expansion1 Copper Production (kt) Cost Curve Percentile (RHS) 400 100% 300 75% 200 50% 100 25% 0 0% FY08 FY09 FY10 FY11 FY12Notes. 1. Subject to approvalsFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 24
  25. 25. Copper Zambia Top 12 copper mines by Cu grade of resources (%)Achieved Underground mine Open pit mine KOV, DRC (Katanga) 5.1% Konkola shaft#4 sunk to final 1500m depth Konkola, Zambia (Vedanta) 3.6% − Commissioned 2900level high speed tramming facility Kamoto, DRC (Katanga) 3.4% increasing mine development pace Tenke, DRC (Phelps, Tenke) 3.1% Projects commissioned in FY2012 Kananga, DRC (Katanga) 2.1% Nchanga, Zambia (Vedanta) 1.6% − 2nd Cobalt Recovery Furnace Tilwezembe, DRC (Katanga) 1.5% − 7.5mt Nchanga East Concentrator Olympic Dam, Australia (BHPB) 1.1% Escondida, Chile (BHPB, Rio) 1.1% − TLP-IV debottlenecking to 75ktpa Chuquic-amata,Chile(Codelco) 0.9% Exploration: Maintained track record of R&R replacement Collahuasi, Chile (Anglo, Falconbridge) 0.8% Grasberg, Indonesia (Freeport) 0.8% Source: Raw Materials, CPR, company websitesFocus - FY2013 Priorities Operating Performance Copper Production (kt) Integrated COP (in c/lb, RHS) 3mt West Mill to be commissioned in Q2FY2013 400 300 Accelerate Konkola mine development pace to 60km/year 300 200 Bottom shaft loading at KDMP by Q3 200 − Platform for 25-30% annual growth in mined metal 100 100 Start regular mining at Nchanga Upper Ore Body 0 0 FY08 FY09 FY10 FY11 FY12 FY13e¹ Notes: 1. Production incudes FY2013 est. of 175kt integrated production and Q1 FY2013 custom production annualized to 52kt; COP of Q1 FY2013.FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 25
  26. 26. Aluminium and Power Aluminium - Lower Half Cost PositionAchieved Aluminium Smelter Costs (C1 Cash Cost Curve) 1mtpa Alumina capacity, 750kt Aluminium capacity with 3,000 1800MW captive power Al Composite cost - c1 cash cost − Higher volumes of value added products, 25% increase BALCO VAL ($ 1,910/t)1 2,000 ($ 1,845/t)1 in FY2012 ($/t) − Aluminium costs in lower half of cost curve without captive bauxite 1,000 Commercial power: 2,770MW thermal and 275MW wind 0Focus 25% 50% 75% Cumulative Production (Percentile) Committed to an integrated Aluminium Strategy Source: Wood-Mackenzie for Aluminium C1 cost curve, VAL and BALCO shown at reported costs in Q1 FY2013 − Focus on securing Bauxite Operating Performance − BALCO 325kt smelter - First metal in Q3 FY2013 Aluminium Production (kt) CoP (in $/t, RHS) 800 3,000 − VAL 1.25mtpa smelter nearing completion and start-up under review 600 2,000 Power 400 − Commence BALCO 1,200MW and Talwandi Sabo 1,000 1,980MW power plants 200 − 211mt Coal block at BALCO 0 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Q1 FY13¹ Notes. 1. Q1 FY2013 annualizedFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 26
  27. 27. Strong Focus on Exploration Zinc India Zinc-Intl Iron Ore Copper-Zambia Oil & Gas Added 3x times Added mine life at India R&R increased to R&R replacement mined out in all three assets 689mt from 457mt ratio of 1.75x in Added net 68mt in FY2012 at acquisition FY2012 FY2012, 18 year Current mine life: Added 4.8x times mine life2 Rajasthan potential 24+ year mine life mined out since IPO − Skorpion: with high grade at resource increased 5+years1 R&R increased from R&R increased to KDMP to 7.3bn boe gross 190mt 3 at 332mt, from 144mt − BMM: 10+years in place from 6.5bn acquisition to at Vedanta IPO − Lisheen: 3years boe 374mt – added 3.4x 25+year mine life times mined out Exploration success with 10%+grades 186mt Gamsberg deposit feasibility at Sri Lanka and Liberia study underway Nagayalanka 1bn tonnes R&R 17 year R&R life Aeromagnetic study and 25,000+metres drilling indicates strong potential upside Creating Long Term Value through ExplorationNotes: 1. With some additional work for conversion of resources to reserves 2. At capacity for current producing assets, subject to approvals 3. 120mt excluding Orissa from Sesa Goa acquisition, and 70mt from Dempo acquisitionFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 27
  28. 28. Financials D.D. JalanChief Financial Officer
  29. 29. Financial Highlights Track record of delivering strong margins − Driven by a diversified portfolio of high growth assets − Cairn India has contributed to the diversity and scale of cash flow generation Substantially invested projects to drive free cash flow Progressive dividend policy, CAGR of 17% over the last 5 years FY2012 proforma with $mn or as stated Cairn FY2012 FY2011 EBITDA 5,353 4,026 3,567 EBITDA margin1 (%) 46.7% 40.6% 44.6% Underlying Attributable PAT2 571 387 715 Underlying EPS($/share)2 2.09 1.42 2.63 Free Cash Flow before Growth Capex 3,128 2,534 2,347 Growth Capex3 2,728 2,398 2,517 Total Dividend (USc/share) 55.0 52.5Notes: 1. Excludes custom smelting operations 2. Based on profit for the year after adding back special items and other gains and losses, and their resultant tax and minority interest effects 3. Excludes sustaining capexFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 29
  30. 30. Strong Financial Profile Cash and Liquid Investments of $6.9bn, with additional $2.9bn undrawn lines of credit FY2012 Proforma Net Debt:EBITDA including Cairn of 1.9x; Credit ratings of BB/Ba3/BB1Debt Maturity Profile ($bn)2 $1.7bn - Bridge loan to be rolled over into long term facilities $0.7bn - Revolving working capital facility $0.4bn - Refinanced 4.5 4.1 $0.3bn - To be repaid through internal cash flows US$1bn maturities at plc in FY2013: $550mn refinanced to date 3.2 2.3 2.7 0.3 2.4 3.1 0.5 1.3 3.0 1.5 0.7 2.2 1.3 1.0 0.4 0.5 0.1 0.3 FY2013 FY2014 FY2015 FY2016 FY2017³ FY2018 and later Debt at VED plc Debt to be transferred from VED plc to Sesa Sterlite Debt at SubsidiariesNotes: All information as of 31 March 2012, except information on refinancing 1. Issue credit Ratings as per S&P, Moody’s and Fitch respectively 2. Debt numbers shown at face value 3. Includes convertibles at Vedanta Plc of $883mm due in FY2017 (with a put option in April 2013) and $1,250mm due in FY2017 (with a put option in July 2014)FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 30
  31. 31. Group Simplification to Reduce Debt at plc Debt Service Liability at plc ($bn) Post group structure simplification, debt service 10 9.8 liability at plc reduces by 61% to $3.9bn Intercompany receivable created at Vedanta, Debt service cost at Vedanta reduces from from Sesa Sterlite $500mn to $190mn in FY2013 (2.8) Debt transferred to Sesa Sterlite; guarantee continued by Vedanta 5 Payout-based dividend policies at subsidiaries to 3.9 result in significantly higher dividends to plc (3.1) 0 Service Liability Service Liability Pre Transaction Post TransactionNote: Numbers as of 31 March 2012FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 31
  32. 32. Sustainable Development Tony Henshaw Chief Sustainability Officer
  33. 33. Sustainability Model Embed sustainable development into every aspect of what we do To improve our health and safety performance for a safer, more secure and healthier environment To contribute further and in a more targeted way to local communities To continue to manage and minimize our impact on air, water and land To maintain a dialogue with stakeholders to help us further understand what is needed to help support a sustainable society and planetFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 33
  34. 34. Responsible Stewardship – Health & Safety Health Safety Investing in technologically advanced Goal is to reach & sustain “Zero Harm” processes that reduce possible 48% reduction in LTIFR in last five exposure levels at work area years Focused programme on elimination of Regular medical check ups - Over unsafe conditions across units 87,000 medical examinations conducted Exco sub-committee on sustainability in FY2012 formed - current focus is on safety performance Monitoring and review of industrial 134,000 man hours of safety training hygiene parameters such as noise imparted last year exposure, illumination levels and Targeting LTIFR less than 0.80 in manual handling FY2013 and less than 0.50 by FY2016 LTIFR -48% 1.9 1.7 1.5 1.1 1.0 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Vedanta is committed to providing a safe, injury-free and healthy place to workFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 34
  35. 35. Responsible Stewardship – Environment Water Doubled water recycling to 55.7MCM in FY2012 14.5MCM of rainwater harvested in FY2012 Energy Energy saving target for FY2013 is 3.9mn GJ, equivalent to 120MW power station Climate Change 274MW wind power capacity 61MW generated from waste heat 16.2% decrease in GHG emissions (scope 1 & 2) per total revenue Solid Waste More than 70% of non-hazardous waste generated is constructively utilised Extensive research with best institutes in India to constructively utilize Jarofix and Red mud Vedanta is committed to mitigating the environmental impact of our activitiesFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 35
  36. 36. Adding and Sharing Value – Our Communities Community programmes reaching 3.1 million people in India and Africa Community spend of US$38 million in FY2012 Working in partnership with 149 NGO’s and academic institutions Focus areas– Child Care, Education, Women Empowerment, Sustainable Livelihood , Health Water & Sanitation and Bio-Investment US$4.8 billion1 total contribution to Indian government exchequer in FY2012 350 bed Cancer Research Hospital at Raipur - US$61mn investment Working in partnership with our communities is an integral part of our strategyNotes. 1. On a proforma basis including incl $2.8bn by Cairn India for full year FY2012FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 36
  37. 37. Assurance – Scott Wilson Vedanta sustainability framework of policies and technical standards completed The framework has been reviewed independently for compliance with the IFC performance standards, the ICMM guidelines and the UN Global Compact Scott Wilson – 17 points closed, 6 points awaiting review for closure, 4 to be closed by the end of year − Final sign off by June 2013 Formalizing our approach to international standards and best practicesFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 37
  38. 38. Vedanta Sustainable Development Report 2011-12 . Please email us at : sustainability@vedanta.co.in For more information visit www.vedantaresources.com/sustainability/ www.vedantaresources.com Please write to us at : Vedanta Resources plc 5th Floor, 16 Berkeley street London W1J3DZFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 38
  39. 39. Summary Global Diversified Natural Resources Major World-class portfolio of large, structurally low-cost, scalable assets with long mine-life Strong financial profile supported by diversified cash flow growth Delivering industry-leading production growth driven by substantially invested projects Recent acquisitions provide additional growth options Focus on additional resources to drive long-term value Group simplification on track for completion in CY 2012FY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 39
  40. 40. Appendix
  41. 41. Our Operations South Africa Oil and Gas Site visit covers Jharsuguda, Agucha, Dariba, Sindesar Khurd, Rajasthan O&G, Goa iron ore • Block-1 Zinc-lead-silverIndia • Debari smelter Zinc-lead-silver • Chanderiya smelters • Black Mountain • Rampura Agucha mine • Gamsberg Oil and Gas • Dariba mine, smelters • Rajasthan • Zawar mine Namibia • Cambay • Sindesar Khurd mine • Ravva • East Coast Zinc-lead-silver • West Coast • Skorpion • Sri Lanka Ireland Zinc-lead-silver • Lisheen Liberia Iron ore • Liberia Iron Ore Assets Aluminium • Lanjigarh alumina refinery Zambia • Jharsuguda smelter Copper • Korba smelter and Iron ore • KCM power plant • Goa • BALCO coal block • Karnataka Australia Power Copper • Talwandi Sabo • CMT Copper • Jharsuguda power • Tuticorin • MALCO power plant copper smelter Sri LankaFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 41
  42. 42. Global Diversified Natural Resources Major Zinc-Lead- Oil & Gas Iron ore Copper Aluminium Power SilverCountry and Positioning India, Ireland, India, Sri Lanka, Zambia, India, Namibia, South India, Liberia India India South Africa1 Australia Africa World class Zambian One of India’s largest Largest Indian operations, Indian Largest integrated Strategically located One of the largest private crude oil private iron ore custom smelter zinc-lead producer large-scale assets producers in India producers producer-exporter among lowest cost smelters globally Capacity 1.5mtpa, India: 400ktpa, 3.8GW, 175kbopd, 21mtpa1 740ktpa, 16moz silver upto 800ktpa1 upto 8.6 GW upto 300kbopd1 +Liberia upto 2.3mtpa +Gamsberg Zambia upto 400ktpa (3.9GW commercial) Growth profile Gamsberg - one of 2013:c.240kbopd1 36mtpa capacity India: 400ktpa BALCO 325ktpa 1.98GW Talwandi the largest from Rajasthan expansion expansion1 first metal in Q3 Sabo by FY2014 undeveloped zinc FY2013 300kbopd1 basin Liberia project, KCM ramping up deposits: 186mt potential shipment from 1st to 400ktpa BALCO 1200MW at 6.9% grade phase in FY2014 first unit sync by Q2 FY2013 Well Invested Asset Base driving GrowthNotes: 1. Subject to approvalsFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 42
  43. 43. Oil & Gas - AssetsSnapshot of Assets Working Interest Hydrocarbons Reserves andOil and Assets – Gross 2p Initially In-place Resources Working(i.e. Gross Proved and Probable) (mmboe) (mmboe) Block InterestRajasthan Block (RJ) - MBA Fields 2,090 636 RajasthanRajasthan Block (RJ) - MBA EOR - 308 RJ-ON-90/1# 70 %Rajasthan Block (RJ) - Other Fields 2,088 178 East CoastRajasthan Block (RJ) - Total 4,178 1,122 KG-DWN-98/2 10 %Ravva Fields 690 70 KG-ONN-2003/1 49 %CBOS/2 Fields (in Cambay Basin) 182 13 PKGM-1 (Ravva)# 22.5 %Other Fields 792 426 KG-OSN-2009/3* 100 %Total 5,842 1,631 PR-OSN-2004/1* 35 % West CoastHighlights CB/OS-2# 40 % Three operating blocks MB-DWN-2009/1* 100 % − RJ current production at c.175 kbopd Sri Lanka − Basin potential of 300 kbopd − Two mature blocks, effort ongoing to arrest the decline rate SL 2007-01-001 100 % Worlds’ longest continuously heated and insulated pipeline South Africa (SA) 10 blocks under exploration Block 1** 60 % − Exploration success ratio c.50% R&R Life: 17 years Q1 FY 2012-13: − Average Daily Gross operated production at 206,963 boe − Cairn Working Interest production at 127,226 boe # Producing Blocks; *Under Force Majeure; ** Farm in agreement signed on 16 August 2012, subject to South African regulatory approvalsFY2012 INDIA OPERATIONS SITE VISIT – CORPORATE PRESENTATION - 24 SEPTEMBER 2012 43

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