LONGWALL 2012
Crowne Plaza Hunter Valley
22nd October 2012
Andy Mifflin
GVK Resources
Alpha Coal Project and proposed Kevi...
2
Important notice
- Disclaimer
IMPORTANT: The information in this document has been provided to you for information only ...
3
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
...
4
Source: Factset, Factiva, company presentations.
Operations
 Eight Power Projects – Gas, Hydro &
Thermal
 5,106 MW of ...
5
In 2011, GVK acquired a 79% interest in each of the Alpha Coal Project and the Alpha West Project and 100%
interest in K...
6
Alpha Coal (GVK 79%) Kevin’s Corner (100%) Alpha West (GVK 79%) GVK Railway (100%) GVK Port (100%)
 Expected to be the ...
7
Regional setting of the Galilee Basin
Galilee Project highlights:
 Thick, consistent coal seams
 Shallow seam occurren...
8
Strategy
If you had the opportunity to create new mine, in a new coal basin, in a
location that demanded application of ...
9
Introduction to Kevin’s Corner
Kevin’s Corner is a self-
contained mining
complex of 3
undergrounds and 2
open-cuts.
It ...
10
10
Seam Cross-Section
10
A
B
C
D
Open-cut
10:1
Vert:Horiz
Scale
11
Kevin’s Corner Objectives
 10 Mtpa ROM target output from each of the 3 longwall Mines, with additional coal
from open...
12
Industry Context
Where we have come from:
 In the 1990’s 3 Mtpa longwalls were considered to be the benchmark
 In the...
13
ACARP Project C15008(L15)
Defining the system needs for a 15MTPA Longwall Operation
 Management
 Management systems ,...
14
Kevin’s Corner DNA
 Gas – Very low > 0.2m3/t but panels require 3x800kw fans & intake shafts
 Dust – post-dewatering ...
15
 Roof –immediate 2m of roof between 8 to 24 MPA with the next 6m to 8m in
the range 16 to 24MPA. Minimum 50m of fresh ...
16
Productivities
Productivities are defined by acceptable industry averages for bankability.
The systems has been designe...
17
Coal Handling
18
Kevin’s Corner CPP – Processing Module
Coarse Coal CircuitFine Coal Circuit
19
Site Infrastructure
Mine Infrastructure consists of:
 Mine access corridors
 Accommodation Village
 Airport
 Light ...
20
Accommodation
 Designed for 900
to 1200 people
with master
planning to go
larger
 Different
strategies in how
we rega...
21
Inertisation Equipment
 Assumed immediate
demand for Proactive
Inertisation
 Longer term ambition
to go to Integrated...
22
Airport
 Personal & Freight
Logistics are an
important part of the
mine’s operations.
 An airport is key to
making it...
23
Light Industrial Area
 A purpose built LIA is
made possible due to
the 3 Undergrounds
and 2 open cuts to
consolidate n...
24
Control Room
 Rethinking how control
rooms need to work
across a multi-mine
complex considering
safety & process
contr...
25
People factors
 Next workforce generation expectations
 Baby Boomers
 Gen X, Gen Y, Gen Z
 Workforce life choice de...
27
In Conclusion…
 Kevin’s Corner is a mine with the right DNA, and happening at the right time
to create a benchmark in ...
28
I would like to thank the many various engineering and consultancy
groups for their patience and assistance in being ab...
29
Thank You !
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Alpha Coal Project & Proposed Kevin’s Corner Project

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Andy Mifflin, Bankable Feasibility Manager, from GVK – Hancock Coal delivered this presentation at 2012 Longwall conference in the Hunter Valley Australia. Building on eleven years of excellence it’s rare that such a large gathering of underground coal operators come together under the one roof, providing a great opportunity to catch up with friends, industry leaders, former colleagues and longwall mining specialists.
For more information, please visit: http://www.longwallconference.com.au

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Alpha Coal Project & Proposed Kevin’s Corner Project

  1. 1. LONGWALL 2012 Crowne Plaza Hunter Valley 22nd October 2012 Andy Mifflin GVK Resources Alpha Coal Project and proposed Kevin’s Corner Project
  2. 2. 2 Important notice - Disclaimer IMPORTANT: The information in this document has been provided to you for information only by Hancock Coal and the GVK Group (GVK) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this document does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision, you should consider, with or without the assistance of professional securities adviser, whether an investment in Hancock Coal and GVK is appropriate in the light of your particular investment needs, objectives and financial circumstances. Nothing in this document should be considered a solicitation, offer or invitation to buy, subscribe for or sell any security in any place in which, or to any person to whom, it would be unlawful to make such an offer or invitation. The distribution of this document outside India may be restricted by law. Persons who come into possession of this document who are not in India should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Neither this document nor any copy hereof may be transmitted in the US or distributed, directly or indirectly, in the US or to any US person including (1) any US resident, (2) any partnership or corporation or other entity organised or incorporated under the laws of the US or any state thereof, (3) any trust of which any trustee is a US person, or (4) and agency or branch of a foreign entity located in the US. By accepting this document you agree to be bound by these limitations. Hancock Coal and GVK have prepared this document based on information available to it. Although reasonable care has been taken to ensure that the facts stated and opinions given in this document are fair and accurate, the information provided in this document has not been independently verified. Accordingly, no representation or warranty, express or implied is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. To the fullest extent permitted by law, none of Hancock Coal, GVK, directors, employees or agents or any other persons accepts any liability for any loss whatsoever arising from any use of this document or its contents, or otherwise arising in connection therewith.
  3. 3. 3 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Mt China India Japan South Korea Taiw an Malaysia Germany Other ForecastHistorical Source: Wood Mackenzie • World thermal demand projected to more than triple in volume within the life of the mine. • Seaborne coal demand is expected to grow at 5.5% CAGR over the next 20 years. • Growth is primarily concentrated in the Pacific basin. • Australian thermal coal exports are expected to increase from 145 Mt in 2011, to 316 Mt in 2020, reaching 654 Mtpa by 2030 subject to infrastructure constraints being addressed. Market Setting
  4. 4. 4 Source: Factset, Factiva, company presentations. Operations  Eight Power Projects – Gas, Hydro & Thermal  5,106 MW of Power  India’s Largest Private Airport Operator  Mumbai International Airport – 30m pax  Bangalore International Airport – 12m pax  India’s First 6 Lane Expressway  Over 550km of roads under construction / development with plans for Mass Rapid Transit  Greenfield port planned (Gujarat)  7 deepwater oil & gas blocks in partnership with BHP Billiton  Alpha and associated port and rail infrastructure  Kevin’s Corner and Alpha West deposits  Two mines in India  Two large-scale integrated developments in urban environments  Airport City (Mumbai) and GVK One (Hyderabad)  6 world-class properties and one under construction  Total room base of over 1,000  Provides a broad spectrum of across the R&D value chain in chemistry, biology and informatics; PowerAirportsTransportOil&GasHotelsUrbanMining  GVK Group includes GVK Power and Infrastructure Limited (“GVKPIL”) and various other interests of the GVK Family  GVKPIL is a listed entity and an ultimate holding company of “GVK” which operates in diversified assets through different vertical businesses  GVK’s assets are predominantly in energy, airports and transportation  Revenues are derived primarily from O&M fees, incentives for operating the businesses of subsidiaries, and secondarily from the interest income earned out of managing surplus funds through superior financial planning  GVK employs over 8,000 people plus another 15,000 staff for its not for profit EMRI business Project value add GVK is a natural strategic fit for the Galilee Projects  Ability to link Australia to India and the Ultra Mega Power Projects (UMPP) programme  As a major emerging coal user, GVK is committed and aligned to the successful development of its Galilee Basin projects Infrastructure expertise  GVK is a leading infrastructure player  The development of the rail and port infrastructure is the key to opening up and developing the Galilee Basin  Experience in financing and developing large scale projects Investment / financing capability  GVK has strong relationships with leading global banks across debt and equity  It has a track record of success in working with partners and attracting financing for the delivery of large complex projects Commitment to Australia  GVK is committed to expanding its business in Australia  GVK is seeking to expand its resource and infrastructure portfolio to include Australia, particularly Queensland with its Galilee Basin investment being its seed asset. Overview Bioscience Introduction to GVK
  5. 5. 5 In 2011, GVK acquired a 79% interest in each of the Alpha Coal Project and the Alpha West Project and 100% interest in Kevin’s Corner Coal Project and 100% of the Infrastructure Projects: Hancock Transaction Hancock Alpha West (Alpha West coal project ) Hancock Galilee (Kevin’s Corner coal project) 79% Hancock Coal (Alpha coal project) GVK Galilee Infrastructure (Rail and Port projects) 21% 79%100% 100% GVK Family GVK Power and Infrastructure 90% 10% 54% GVK Family  Privately owned with interests spanning energy, infrastructure, transportation, realty, hospitality, bioscience and manufacturing  90% investor in the Galilee Basin assets  Management responsibility GVK Power and Infrastructure  Publicly listed, 54% owned by the GVK Family  10% investor in the Galilee Basin assets  Not a key decision maker but will have a board representation  Potential to participate in the coal offtake arrangements on behalf of GVK’s coal fired power stations Hancock Group  Hancock Prospecting Pty Ltd (Hancock Prospecting) is a leading privately owned, Australian mining company with interests in iron ore, coal, manganese, uranium, diamonds and copper/gold  Hancock would be a minority partner in the Alpha and Alpha West projects GVK Coal Developers
  6. 6. 6 Alpha Coal (GVK 79%) Kevin’s Corner (100%) Alpha West (GVK 79%) GVK Railway (100%) GVK Port (100%)  Expected to be the first thermal coal project to commence mining in the Galilee Basin  It will rank as one of the largest thermal coal operations in the world and represents the next generation of independent thermal coal supply  Up to 32Mtpa export grade thermal coal  Also expected to rank as one of the largest thermal coal mines in the world  Up to 30Mtpa export grade thermal coal mine  Large underground mine west of Alpha  16-24Mtpa export grade thermal coal mine  495km, standard gauge, stand alone rail link from Galilee Basin to Abbot Point  25,000t haul per train designed to replicate the efficiencies of the Western Australian iron ore industry  Dedicated terminal at Abbot Point  Queensland’s most northern coal port  Ability for up to 70Mtpa subject to more efficient use of stockpile area and berth configuration  1.82Bt resource  1.1Bt reserves  4.3Bt resource  1.8Bt resource  60Mtpa capacity  Scalable to 120Mtpa  Awarded Preferred Developer for T3  Framework Agreement agreed  Open cut mining, 30 years mine life  First coal by H2 2016  Ramp up from 2016 to 2019  Open cut & underground mining  30 year mine life  Underground mining  30 year plus mine life  First privately owned railway in Queensland  Offshore berth option elected  High grade thermal coal for export markets, mainly suitable for the premium North Asian utility market  High grade thermal coal for export markets  First coal by 2017  Ramp up from 2017 to 2020  High grade thermal coal for export markets  Pre feasibility drilling has commenced  Mining targeted for 2018  Supported by State and Federal governments  Rail corridor finalised  2 x 30Mtpa stockpile capacity  2 x dedicated ship berths  BFS completed  Mining lease expected to be issued by Q1 2013  Native Title negotiated  Construction tenders commenced  LOIs for 43Mtpa received  Prefeasibility completed  BFS commenced  Mining lease expected to be issued by 2013  Native Title negotiated  Concept study completed  BFS expected by 2014  Leverage Alpha related studies and approvals  Rail approval by Q2 2012  Third Party and ACCC consultation underway  Native Title negotiated  State significant project  Land owner discussions well advanced  Port approval in place The Galilee Basin assets comprise a large scale, high quality thermal coal resource with integrated rail and port infrastructure located in Australia’s next major coal basin Summary of Assets
  7. 7. 7 Regional setting of the Galilee Basin Galilee Project highlights:  Thick, consistent coal seams  Shallow seam occurrence at the eastern flank of the basin  Gentle dip to the west  Minimal structure (faulting, folding)  Significant resource base  Good thermal coal  Low gas content  Not affected by Strategic Cropping Land policy GVK Coal Projects Location of the Coal Project’s within the Galilee  Centre of projects approximately 70km north west of Alpha  Alpha approximately 170km west of Emerald  Rail line approximately 490km to the port of Abbot Point 0 150km Galilee Basin Bowen Basin GVK Railway GVK Port Major highway Existing railway Alpha Coal Project The Galilee Basin Carmichael Project (Adani) (Vale Exploration) Kevin’s Corner (GVK) Alpha Coal Project (GVK) South Galilee Coal Project (AMCI / Bandanna Energy) China First Project (Waratah Coal) Waratah Coal exploration Alpha West (GVK) China Stone (Macmines) Kevin’s Corner Project
  8. 8. 8 Strategy If you had the opportunity to create new mine, in a new coal basin, in a location that demanded application of the latest technologies … What would you do? If you had a mine that had a billion tonnes of coal from just one of the seams to be recovered over 30 + years ….. What would you do? If you reframed your thinking, to consider that we are an energy exporter, so we have to use less to produce more… What would you do?
  9. 9. 9 Introduction to Kevin’s Corner Kevin’s Corner is a self- contained mining complex of 3 undergrounds and 2 open-cuts. It has a moderate energy thermal coal targeted for India and South East Asia. There are challenges with new focus on energy intensive industries and carbon generation It also has a set of ‘unconstraints’ of having large geometry reserve (18km along strike and 12km down dip from ~100m DoC to a peak of 300m beyond 30yrs, dipping at just 1 to 2deg
  10. 10. 10 10 Seam Cross-Section 10 A B C D Open-cut 10:1 Vert:Horiz Scale
  11. 11. 11 Kevin’s Corner Objectives  10 Mtpa ROM target output from each of the 3 longwall Mines, with additional coal from open-cut operations.  Interchangable “hot-start” longwall systems  Ventilation system designed to handle the most severe conditions to ensure the right air is there when we need it.  New thinking in the way vehicles and people will communicate and interact.  People roles as either specialists or generalists; decision-makers rather than doing robotic and repetitive tasks (which will be progressively prepared for automation).  Safety and operating systems that run as default, rather than an add-on.  Technology applications; Proven, New , & On the way  Innovation where there isn’t a solution – Wider industry applications.
  12. 12. 12 Industry Context Where we have come from:  In the 1990’s 3 Mtpa longwalls were considered to be the benchmark  In the 2000’s 5 Mtpa longwalls were considered to be the benchmark  By 2009, Newlands and Oaky North were showing what could be done in Australia  The USA has long been considered to have benchmark Longwalls  China is delivering longwall performance and standards that we can all be envious of Kevin’s Corner has the right DNA to deliver benchmark performance In anticipation of this:  The project has been designed for 15 Mtpa (each LW) i.e. 1.2 Mtpm:  Capacities in place  Anticipating further technology advances.  Minimising barriers to incremental improvement.
  13. 13. 13 ACARP Project C15008(L15) Defining the system needs for a 15MTPA Longwall Operation  Management  Management systems ,styles and process engineering  Equipment  Capacity requirements  Resources  Resources to support the footprint  Strata Control  Weak roof and inadequate support smart monitoring  Development  Clear understanding of process & effective management  Hazard Management  Ventilation, gas, dust Spon com  Water  Consumption and management / Modeling  Utilisation  Nameplate capacity / Maintenance management  Community  Licence to operate / sustainability  Technologies  Automation/ Communication ACARP Project C15008 (L15) High capacity Underground Coal Mining: Scoping Study D.Reece, G.Rowan,Dr G.Chitombo
  14. 14. 14 Kevin’s Corner DNA  Gas – Very low > 0.2m3/t but panels require 3x800kw fans & intake shafts  Dust – post-dewatering dust will be an issue with BI-Di cutting  Heat – Planned for BAC’s and Heat dumps to returns. Vent system tested to be able to turn to homotropal if required  Spontaneous Combustion – A key factor in the designs  Water – Surface to seam dewatering will be required to effectively manage the potential flows into the mine  Faults – A combination of 2D seismic and aeromagnetics has been used to identify potential faults. No intrusions.
  15. 15. 15  Roof –immediate 2m of roof between 8 to 24 MPA with the next 6m to 8m in the range 16 to 24MPA. Minimum 50m of fresh cover base defines the start of longwall mining.  Seam characteristics – Firm roof, hard coal and Firm Non Slaking Floor.  Panel orientation – Dictated by stress direction is NE–SW (3.6 to 4.9MPA at 200m depth). Maingates on the stress relieved hence a N-S retreat along strike. Panels progress down dip (West). 250m depth of cover after 30yrs.  Seam Splits – Defines the boundary for the Northern mine (2.5 to 3.5m) South and the central area 4.5 to 5.5m Kevin’s Corner DNA
  16. 16. 16 Productivities Productivities are defined by acceptable industry averages for bankability. The systems has been designed for benchmark performance (Capex/Opex conflict for bankability)  Development – 200 to 250m per week  Longwall – 15000 to 16000 tonnes per shift  Outbye – Specialist crews operating between 3 mines  Opencut – 8Mtpa ROM flexible operations providing swing capacity  CHPP – 42Mpta ROM / 6000tph capacity DMC and Reflux Classifier
  17. 17. 17 Coal Handling
  18. 18. 18 Kevin’s Corner CPP – Processing Module Coarse Coal CircuitFine Coal Circuit
  19. 19. 19 Site Infrastructure Mine Infrastructure consists of:  Mine access corridors  Accommodation Village  Airport  Light industrial area  Control rooms  Inertisation facilities  Water Management Designed as a remote operation with a strong focus on logistics of people, plant and materials Designed to support benchmark performance operations
  20. 20. 20 Accommodation  Designed for 900 to 1200 people with master planning to go larger  Different strategies in how we regard accommodation infrastructure.
  21. 21. 21 Inertisation Equipment  Assumed immediate demand for Proactive Inertisation  Longer term ambition to go to Integrated Cryogenic systems
  22. 22. 22 Airport  Personal & Freight Logistics are an important part of the mine’s operations.  An airport is key to making it work as well as rail freight.
  23. 23. 23 Light Industrial Area  A purpose built LIA is made possible due to the 3 Undergrounds and 2 open cuts to consolidate non-core infrastructure and consider a remote operating mine.  It’s designed to be developed progressively and its use will change over time
  24. 24. 24 Control Room  Rethinking how control rooms need to work across a multi-mine complex considering safety & process control.  Communications systems designed for off-site OEM support and remote office systems.
  25. 25. 25 People factors  Next workforce generation expectations  Baby Boomers  Gen X, Gen Y, Gen Z  Workforce life choice decisions  4 careers / 16 jobs  Current continued acceleration in computing power  Currently greater than exponential growth  Technology cost crossover  The point at which one mining process cost out ways another  The 99 to 1 rule  Treating the 100% for the actions of the 1%  Flexibility is the norm  Constraint on remote operations and expectations
  26. 26. 27 In Conclusion…  Kevin’s Corner is a mine with the right DNA, and happening at the right time to create a benchmark in underground performance.  The project team has been largely unconstrained in the design of KC, however ensuring that the CAPEX that underlines the master planning doesn’t conflict with “Bankable Expectations”.  Can we do a 3 x 10Mtpa Longwall Complex? In fact we have ambitions and a master plan to go well beyond this
  27. 27. 28 I would like to thank the many various engineering and consultancy groups for their patience and assistance in being able to push the edges of some of the projects designs to align with our strategy whilst at the same time recognising the need to deliver a bankable project.
  28. 28. 29 Thank You !
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